African Bank ran into trouble in 2014 after accumulating too many bad loans and suffering heavy losses.
African Bank has assured shareholders and the public that operations remain stable and there is nothing to worry about, despite governance concerns following the abrupt resignation of former CEO Kennedy Bungane from all his positions at the bank.
In a media statement, the bank, which was rescued about a decade ago, threw its full support behind the interim CEO Zweli Manyathi and reaffirmed confidence in the bank’s leadership and long-term strategy.
It all started when Bungane’s resignation was announced in a note to shareholders in early March 2026, with no explanation for his departure, only appreciation for “his significant contribution in the crafting and implementation of the Excelerate Strategy.”
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It is uncommon, though not unheard of, for a CEO of a listed company to step down with immediate effect. In most cases, a succession plan is in place, with the outgoing executive remaining for a transition period to ensure a smooth handover to their successor, as currently seen at Spar and Woolworths.
Alternatively, when an executive is moving to another company, they are typically placed on garden leave, a period during which they remain employed and continue to receive their salary, but are restricted from performing duties or accessing sensitive information. Standard Bank applied this approach after Kenny Fihla resigned to be Absa CEO.
However, neither of these approaches was applied by the African Bank’s board. “Kennedy Bungane has stepped down as the group’s chief executive officer and as an executive director of African Bank and African Bank Holdings Limited Boards of Directors, effective 6 March 2026,” said the bank.
“Consequently, Kennedy resigns his memberships of the Social, Ethics and Transformation and the Special Projects and Large Exposures board committees.”
Trouble at African Bank?
As the bank did not provide detailed reasons for his departure, it left a vacuum for the public and shareholders to fill in, a gap that Business Day‘s article has sought to address.
The publication reported Bungane was “pushed out at a highly charged directors’ affairs and governance committee meeting last week, at which the group’s poor first-quarter performance and a regulatory reporting mistake to the Prudential Authority (PA) were used to force his hand”.
According to the article, the bank had a poor showing in the first quarter of its financial year. While this is seasonally a poor period for the lender, the quarter under review was considerably worse.
Despite aggressive efforts to diversify, a large portion of the group’s business still relies on unsecured lending, leaving it exposed to higher impairments, especially ahead of the festive season, when loan defaults typically rise.
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Errors in regulatory reporting?
The article further states that the board pushed for Bungane’s removal due to errors in the bank’s regulatory reporting to the PA under a new framework.
These issues are linked to the implementation of Basel III+ rules last year, introduced by the PA to strengthen transparency around risk, leverage and capital adequacy.
In a media statement released on Monday, African Bank said, “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.
“All material findings are reported to the relevant authority, including the Prudential Authority, as and when they are identified, investigated and resolved. The board and African Bank leadership remain committed to this mission.”
Changes in leadership
In the same breath, the bank said it noted S&P Global Ratings’ commentary on the appointment on interim CEO, stating that leadership changes at the bank are unlikely to lead to a significant shift in the lender’s strategy.
“The board also notes S&P Global Ratings’ bulletin on Friday which indicated that the recent changes in leadership ‘does not point to a major strategic overhaul’ and that the Bank’s ‘governance structure is and will remain adequate and prudent’.”
Throwing its full weight behind the appointment of the interim CEO, the bank said: “The board is confident the leadership team under Manyathi will deliver to stakeholder expectations and sustain African Bank’s growth as we advance.
“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.”
Justifying Manyathi’s appointment, the Bank outlined that he has worked as CEO of Business and Commercial at Standard Bank, chief executive at FNB Branch Banking, and chief executive at FNB Corporate Banking.
“Manyathi 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,” read the statement.
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Succession plan?
African Bank found itself in trouble in 2014 because it had too many bad loans and was losing money heavily. The South African Reserve Bank had to step in and put it under curatorship.
The bank was restructured and officially relaunched in 2016 under Brian Riley, who was CEO. Riley was succeeded by Basani Maluleke in 2018.
Maluleke (now head of Capitec’s personal banking division) resigned in 2021, leading to Gustav Raubenheimer’s appointment as interim CEO.
This has raised questions about African Bank’s succession planning and governance, as the revolving door of CEOs is not a good sign.
Board exercises its responsibility
The board’s media statement attempted to respond to these questions.
“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.”
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