The South African Reserve Bank (SARB) has placed African Bank Investments Limited (Abil) under curatorship and plans to pump nearly $1bn fresh capital to save the crisis-hit lender.

South African Reserve Bank governor Gill Marcus said: "The curatorship is a protection procedure which gives the SARB the legal means to create the necessary space to implement a resolution plan capable of ensuring that the business of African Bank gains a secure perspective for the future as a lending institution with a transformed business model.

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"The Minister has appointed Mr Tom Winterboer as the curator. He will be responsible for African Bank with immediate effect, with the full authority the law confers on the curator."

The Pretoria-based SARB is also planning to split Abil into a ‘good’ bank with a book value of R26bn ($24.3bn) net of portfolio impairment which would be recapitalized with R10bn ($9.3bn) capital raising underwritten by a consortium comprising Absa Bank, Capitec Bank, FirstRand Bank, Investec Bank, Nedbank, Standard Bank, and the Public Investment Corporation ( PIC); and a ‘bad’ bank with the non – and under – performing assets worth nearly R17bn ($15.9bn) which would be purchased by SARB.

Commenting on support measures being implemented by SARB, Marcus said: "These will further strengthen the resilience of the banking system as a whole, and, importantly, they will provide African Bank with the best chance of a viable future."

Abil, based in Johannesburg, has recently been hit by waves of bad loans, posting an estimated headline loss of R6.4bn ($6bn) for the full year to September 2014.

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