EDITORIAL: Lessons from a retired lifeboat
It is clear the politics around the leaked report on Bankorp are simply poisonous
Not long ago, African Bank released its maiden set of results for 2016, surprising the market by making a comfortable profit instead of the expected loss. The bank, created from the "good bank" that was salvaged when the old Abil failed in 2014, is the result of a process in line with best practice for bank rescue globally. The process was transparent. There was careful attention given to who should bear the costs of a bail-in and who should suffer the losses resulting from the bank’s failure. Depositors were protected; so were SA’s financial system and its taxpayers. It could hardly have been more of a contrast to the "lifeboat" — or rather the series of three lifeboats — secretly granted to the ailing Bankorp in the late 1980s and subsequently extended when Absa bought Bankorp in the early 1990s. If there is a silver lining to that dodgy old piece of apartheid-era banking history, it is that SA’s management of bank failures and potential banking crises since then has been exemplar...
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