IN FULL: Here is the pledge by Gauteng MEC for Health‚ Dr Gwen Ramokgopa‚ as she explains how her de.
"The consortium has committed to underwrite a R10 billion capital raising, and will be engaging with shareholders and other participants in this regard," Marcus told reporters at the SA Reserve Bank in Pretoria.
The consortium comprises of Absa Bank Limited, Capitec Bank, FirstRand Bank Limited, Investec Bank Limited, Nedbank Limited, Standard Bank Limited and the Public Investment Corporation.
She said that private/public sector partnership would lead to the African Bank splitting into two.
"On one hand a good bank, which will be recapitalised. Let me emphasise that the R10 billion recapitalisation is for the good bank which has a book value of R26 billion net of portfolio impairments," said Marcus.
"On the other hand we have the bad book, which comprises a substantial portion of the non and underperforming assets, which will be housed in a vehicle with the support of the SARB in order to separate these from the good bank."
She said the bad book would no longer be part of African Bank.
"The bad book currently has a book value net of specific impairments of R17 billion for which the SARB will pay R7 billion. Collection against the bad book will continue and indeed strengthened.
"There is no payment holiday for anyone on a loan from African Bank," said Marcus.
She said collection of funds owed to African Bank would continue with the goal of avoiding costs to the South African taxpayer arising of the rescue intervention measures.
Earlier, Marcus announced that the African Bank Investments Limited (Abil) had been placed under curatorship.
"The first important measure has been the conclusion reached by the Registrar of Banks and the decision by the minister of finance to place African Bank under curatorship with effect from 4pm today," said Marcus.
"African Bank Limited board has, after due consideration, advised the registrar that it does not oppose curatorship and has taken the appropriate resolutions to facilitate the process."
She said Tom Winterboer was appointed as the curator.
"Tom Winterboer is the financial services industry leader for Africa and a member of the global financial services leadership team at PwC (PriceWaterhouseCoopers),"said Marcus.
He would be assisted by a team of experts including Peter Spratt and David Gard of PwC London. Other team members would be announced by Winterboer.
Among many Abil's woes, Marcus said in a six month period to March 2014, the institution posted a headline loss of R3, 1 billion.
"They assured the market that the book written after June 2013 was significantly better and forecast that they would return to profitably in the second half of the year," she said.
Abil's trading statement for the third quarter released on August 6, 2014 was markedly worse than what was expected, with an estimated headline loss for the full year to September 2014 financial year of R6, 4 million.
African Bank's shares plummeted last week after it warned of massive losses and said it needed about R8.5 billion in new capital.
Marcus said African Bank serves 3, 2 million people.
In a joint statement, the Financial Sector Campaign Coalition (FSCC) and the South African Communist Party (SACP) said they were not surprised by the news of the loss of market value experienced by African Bank.
"We are not surprised because we both warned and campaigned against reckless and unsecured lending financial practices that cause debt trap and distress in households and crisis in the economy," said the joint communiqué.
"Reckless lending practices must come to an end. Rather than support practices that cause crisis, the Reserve Bank must combat such practices and prove to be independent from private financial interests."
Abil is the largest provider of unsecured loans in South Africa.