/ 10 February 2002

Saambou curatorship: investors panic

Johannesburg | Sunday

SAAMBOU’S curator, John Louw, will begin assessing the situation at the troubled top-ten bank.

The Registrar of Banks at the Reserve Bank placed Saambou in curatorship at 1pm on Saturday.

This means that Saambou account holders can no longer withdraw their money from the institution.

Louw, of the KPMG auditing firm, told Sapa on Sunday he would be assessing the financial position of the bank in order to normalise the situation there as quickly as possible.

He could, however, not say when deposit holders would be able to withdraw funds from their accounts.

Calls to the bank’s toll free telephone number as well as client services centre were unsuccessful; a recorded message said the numbers did not exist.

The bank’s website was also unavailable.

Meanwhile, Tradek economist Mike Schussler called the development unfortunate.

He said the Reserve Bank was quick to put banks under curatorship.

”Saambou is a good bank,” he said, adding that he believed no depositor would lose any money.

Registrar of Banks Christo Wiese said on Saturday there was nothing structurally wrong at Saambou.

He said the bank was still solvent.

The New National Party on Sunday questioned the country’s bank grading system for deposit-taking institutions.

”The placing in curatorship of Saambou Bank by the Registrar of Banks is a further setback for depositor confidence in the management of some institutions in the South African banking industry,” NNP representative Francois Beukman said in a media statement.

The Saambou curatorship follows those of Regal Treasury Bank, FBC Fidelity and New Republic Bank.

Beukman said thousands of pensioners have investments at Saambou and it is in the interests of maintaining the integrity of the banking system that they regain access to their investments as soon as possible.

”While institutional investors and international banks sold their shares last week, assurances were given that there were no problems at the bank. Many small investors did not withdraw their funds. South American bank flu set in on Thursday and Friday and R1-billion was withdrawn,” Beukman said.

”The key question the public and investors can ask… is whether the current grading of deposit-taking institutions is sufficient or enough.”

Beukman said one of the strong points of the South African economy is its sophisticated banking system, as rating agencies Standard and Poor and Moody’s routinely say in their overviews.

”The grading of South African banks and precisely what it means for the market and the depositor requires attention. Depositors will have to take a more critical view of the opinions of credit rating agencies and should no longer take them at face value.” – Sapa