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South African bank in peril

img_0167African Bank Investments, South Africa’s largest supplier of unsecured loans, which crashed after sounding investors it needed more funds for sustenance is virtually depending on the shareholders and the government to bring in funds to save it from closure. Abil, as it is called, has slumped 90% since its chief executive officer and founder resigned on 6 August and its losses will be at a record this year and it requires about R8.5 billion of new capital. The bank has cut funding to its loss-making Ellerines furniture retailer to shore up returns. In case funds are infused by either the government or the shareholders, it will be the second bailout in less than a week – Portugal’s Banco Espirito Santo needs to be helped by the government or private investors with $6.6 billion after the stocks plunged 73%. The South African Reserve Bank is in talks with Abil.

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