African Bank in hot water

African Bank is in hot water following the shock resignation of CEO Kennedy Bungane at the beginning of March, and reports that it was partly due to a regulatory reporting mistake. 

Bungane is also the third CEO to be ousted under the chairmanship of Thabo Dloti, raising questions about leadership at the bank. 

The board of African Bank has issued a statement dismissing governance issues at the institution, saying it has an established framework to ensure it is compliant with all relevant legislation and regulations. 

“Where the board and leadership of African Bank encounter issues of poor performance and/or non-compliance, it is incumbent on them to act swiftly in fulfilment of this responsibility,” the statement read. 

This statement follows Bugnane’s resignation with immediate effect on 6 March 2026, with Zwelibanzi Manyathi taking the helm as an interim CEO until the board finalises a successor. 

The immediate resignation and lack of a successor indicate that the decision was made hastily and not part of any succession plan. 

African Bank’s board said, in announcing Bungane’s resignation, that Manyathi would oversee the transformation of the bank into a fully-fledged financial institution that services both personal and business customers. 

Business Day later reported that Bungane was pushed out of the CEO role following a “highly charged directors’ affairs and governance committee meeting”.

During the meeting, the bank’s poor first-quarter performance and a regulatory reporting mistake to the Prudential Authority (PA) were allegedly used to force him to step down. 

The regulatory reporting issue stems from the implementation of Basel III+ rules in 2025 by the PA to improve transparency surrounding risk, leverage and capital adequacy. 

African Bank, despite efforts at diversification, remains highly exposed to unsecured lending, which tends to lead to heightened impairments and risk. 

The bank was one of the first to feature annual financial reporting based on the newly applied regulatory requirements. 

Errors in the new Bankers’ Acceptance returns resulted in questions from the PA regarding the credibility of African Bank’s regulatory data and reporting. 

These acceptance returns are mandatory monthly regulatory, financial, and risk reports submitted by South African banks to the PA. 

The PA alerted African Bank to the errors in January. The lender has since resubmitted these reports to the PA with the assistance of an external audit firm, Business Day reported. 

African Bank’s board responds

Bungane is the third CEO to have parted ways with African Bank under the chairmanship of Dloti, with him being the longest-serving by some distance. 

His five years compare to the three served by predecessor Basani Maluleke, who is now at the head of Capitec’s personal banking division. 

Gustav Raubenheimer became interim CEO in 2021 after Maluleke’s departure and was previously head of credit.

This has raised questions about African Bank’s succession planning and its governance, with it not being a good sign that there appears to be a revolving door for CEOs. 

The board has responded to these questions and sought to placate its shareholders, which include the Reserve Bank and some of South Africa’s largest commercial lenders. 

“The board of African Bank, as a collective, has a fiduciary responsibility to the institution and its stakeholders. The board always strives to act in accordance with its fiduciary responsibility and in line with established and accepted regulatory compliance standards,” it said. 

“African Bank, being a regulated entity, has established a governance framework which ensures that it is compliant with all relevant legislation and regulations.” 

The board explained that it is required to report and account to regulators on an ongoign basis and regarding all significant decisions made by the board and/or leadership team. 

“All material findings are reported to the relevant authority, including the Prudential Authority, as and when they are identified, investigated and resolved,” the statement read.  

The board also noted S&P Global Ratings’ bulletin on Friday, which indicated that the recent changes in leadership “do not point to a major strategic overhaul” and that the Bank’s “governance structure is and will remain adequate and prudent”.

The board also declared its support for Manyathi as interim CEO, pointing to his credentials during his time at Standard Bank and FNB as evidence of his quality. 

Manyathi also worked alongside his predecessor for the last four years and oversaw the Business and Commercial Banking division, which has played a key role in African Bank’s growth and diversification strategy. 

He managed the acquisition of Grindrod Bank and some of Sasfin’s businesses, which strengthened African Bank’s Business and Commercial proposition, aiding its expansion into the MSME sector. 

“The board is confident the leadership team under Zweli will deliver to stakeholder expectations and sustain African Bank’s growth going forward.”

“The board is also confident in the long-term stewardship of African Bank, having established a successful leadership talent development system within the Bank that ensures seamless succession and transition.” 

“African Bank remains a responsible institution which is accountable to our stakeholders – including the regulators – and as such, the board, management and employees all act in the best interests of our core stakeholders.”