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South Africa’s Godongwana Rules Out Creation of a New State Bank

South Africa’s Godongwana Rules Out Creation of a New State Bank
Enoch Godongwana Photographer: Dwayne Senior/Bloomberg

South African Finance Minister Enoch Godongwana ruled out the creation of a new state bank, saying the country lacked the money needed to back it. 

The government-owned Post Bank already accepts deposits and if another lender were to be established, it would have to be self-funded, Godongwana told lawmakers on Wednesday. His comments came a day after the central bank announced plans to list its stake in African Bank Holdings Ltd., which Godongwana’s predecessor, Tito Mboweni, last year suggested could be used as as a building block for a new lender.

Read: South Africa Mulls Stake in Lender as it Covets a State Bank

The South African Reserve Bank on Tuesday said it had opted for an initial public offering for African Bank after it failed to identify suitable investors to buy its 50% shareholding.

The central bank, the Government Employees Pension Fund and six of the nation’s largest commercial lenders stepped in to save African Bank with an equity injection when its owner, African Bank Investments Ltd., went into administration in 2014.

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