The Prudential Authority (PA) and the South African Reserve Bank (SARB) have launched proceedings in the High Court for an order to wind up Habib Overseas Bank Limited (HOB).
- HOB was placed under curatorship in March 2023 to deal with its governance, compliance, and operational failures.
- The curator found that HOB’s financial position was significantly worse than reported by the bank’s management and concluded that the bank was insolvent.
- HOB’s total assets are significantly less than its liabilities, and the curator has serious concerns about the bank’s ability to function effectively as a banking institution.
- The PA and SARB have decided that it would be in the best interests of HOB’s creditors, mainly its depositors, for the bank to be placed in final winding up as a matter of urgency.
- This would allow a liquidator to preserve the bank’s assets for the benefit of its creditors and to undertake the necessary investigations into the affairs of HOB.
- Payments to Habib Overseas Bank’s depositors are on track, and qualifying depositors are in line to be repaid R100 000.
- HOB’s winding up is a significant development in the South African banking industry as it highlights the need for strong banking regulations and oversight.