ABIL - Termination of joint venture between Africa
ABL ABLP
ABL
ABIL - Termination of joint venture between African Bank and Standard Bank
AFRICAN BANK INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registered bank controlling company)
(Registration number 1946/021193/06)
Ordinary share code: ABL & ISIN: ZAE000030060
Preference share code: ABLP & ISIN: ZAE000065215
("ABIL" or "the Company")
TERMINATION OF JOINT VENTURE BETWEEN AFRICAN BANK LIMITED ("AFRICAN BANK") AND
THE STANDARD BANK OF SOUTH AFRICA LIMITED ("STANDARD BANK")
Standard Bank has served African Bank notice that it will terminate the joint
venture partnership that exists between the two parties. The partnership was
established in 2000 to utilise the combined competencies to serve the needs of
mass market customers in the delivery of loan and transaction products. The main
rationale for the partnership was for Standard Bank to use its outlets to sell
African Bank loan products to Standard Bank customers and for African Bank to
provide its credit expertise to underwrite and collect on such loans. The
partnership was entered into for a minimum of four years, with the option for
either partner to withdraw from the partnership by giving twelve months" notice.
The partnership granted some 150 000 loans last year, and had an outstanding
loan book of R750 million at 31 March 2006, with African Bank"s share
representing 5,6% of ABIL"s total loan book.
While the relationship has been advantageous for both parties, the two
organisations have been reviewing the partnership over the past twelve months.
In assessing how best to proceed, the partners were attempting to achieve a
balance between Standard Bank"s desire to develop a competence in mass market
lending and African Bank"s view that the partnership would need to be expanded
for it to warrant sustained focus.
The joint venture will continue to operate and serve its clients for the next
twelve months and will terminate with effect from 1 June 2007, where after the
joint venture loan book will run down over time, with the partners sharing costs
and revenues in existing ratios.
ABIL does not expect that the winding down of the joint venture will negatively
affect the attainment of its previously published short and medium-term
objectives.
Midrand
29 May 2006
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 29/05/2006 04:56:04 PM Produced by the JSE SENS Department
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