A deal that was expected to form a cornerstone of African Bank’s growth strategy has collapsed after the conditions required to complete the transaction were not fulfilled in time.
The sale of Eskom’s staff home loan book and assets to African Bank has fallen apart after the parties failed to meet the conditions precedent by the extended deadline of 31 March 2026. The agreements have lapsed, and the transaction is no longer proceeding.
Eskom announced in December 2024 that it would sell the assets housed in Eskom Finance Company SOC Limited, as well as its interest in Nqaba Finance 1 RF Limited. The home loan book was valued at R5.7 billion at announcement. African Bank was selected as the preferred bidder, and binding sale agreements were concluded in April 2025, subject to conditions. The fulfilment deadline was subsequently extended from 30 September 2025 to 31 March 2026.
Eskom said it would assess the most suitable path forward for the Eskom Finance Company, taking into account its strategic objectives and stakeholder obligations, and would make further announcements as required under its regulatory and disclosure commitments.
The disposal had formed part of the conditions attached to the South African government’s R254 billion debt-relief bailout package for Eskom, which required the utility to offload non-core assets as it attempts to refocus on its core mandate of electricity generation, transmission and distribution. The deal’s collapse leaves that condition unfulfilled and places fresh pressure on Eskom’s restructuring timeline.
For African Bank, the collapse represents a further setback in what has been a turbulent period. The transaction had been central to the bank’s Excelerate25 strategy — a plan to scale its home loan portfolio and build the business ahead of a proposed JSE listing that has already been pushed back from 2025 to late 2027 at the earliest. African Bank had previously acquired Grindrod Bank in 2022 and paid Sasfin over R3 billion for its Commercial Property Finance and Capital Equipment Finance divisions. The Eskom loan book would have provided a significant boost to its secured lending ambitions and deepened its relationship with the approximately 3,000 Eskom employees who carry home loans through the finance company.
African Bank was recapitalised to the tune of R10 billion by the South African Reserve Bank after it nearly collapsed in 2014. Since then, it has pursued an aggressive rebuilding strategy, with net profit rising from R521 million in the 2023 financial year to R523 million in 2024. The lender has 5.4 million clients, of whom 1.5 million hold transaction accounts.
Eskom’s broader restructuring, including the unbundling of its generation, transmission and distribution operations, remains work in progress. The utility has simultaneously sought significant tariff increases, proposing a 66% revenue rise over three years beginning in April 2025.