African Bank has begun formal consultations that could see up to 1 200 employees lose their jobs and approximately 90 branches close as the lender moves to reduce costs and improve operational efficiency following a difficult financial period.
The bank confirmed on Thursday that it had entered the consultation phase under Section 189A of the Labour Relations Act with the South African Society of Bank Officials (SASBO), the union representing many of its employees. The process applies to large-scale retrenchments and requires employers and employee representatives to consult on ways to avoid or minimise job losses.
In a statement, African Bank said the decision was not taken lightly.
“This action has not been taken lightly and is a direct result of our current business realities.”
The bank said it had already explored other avenues to reduce expenses before considering staff reductions.
“While we continue to explore all cost-saving avenues to minimise the impact on people, we have reached a point where we have no other option but to review our staff costs.”
According to the bank, the proposed restructuring could affect employees across various divisions and may result in up to 1 200 job losses as well as the closure of around 90 branches nationwide.
Interim Group Chief Executive Zweli Manyathi acknowledged the impact the proposal would have on staff but said the measures were necessary to secure the bank’s future.
“We understand that this is a difficult period for the business and our people. However, it is necessary for the future sustainability of the business.”
Manyathi said the bank would continue engaging SASBO throughout the consultation process before any final decisions are made.
“We will manage this process alongside SASBO and await their feedback from their engagement to determine the next steps and craft the process going forward.”
He also sought to reassure customers and investors that the bank remains financially stable, saying it is “capitalised above minimum regulatory requirements, with adequate liquidity to meet its obligations.”
The contemplated retrenchments come weeks after African Bank reported a net loss of R624 million for the six months ended 31 March 2026. At the time, the bank announced a revised strategy focused on consolidating recent acquisitions, improving efficiency and delaying its planned initial public offering to 2030. It said its cost base had outpaced its risk-adjusted revenue, prompting a review of operating expenses, including IT, procurement, property and staffing costs.
African Bank has expanded aggressively in recent years through acquisitions, including Grindrod Bank, Ubank and Sasfin’s Capital Equipment Finance and Commercial Property Finance businesses. The lender says the current restructuring is intended to extract greater value from those acquisitions while placing the business on a more sustainable footing.
The announcement has been met with strong opposition from organised labour. SASBO criticised the manner in which the proposal was communicated, while COSATU has pledged to support the union in opposing the planned retrenchments and exploring alternatives to save jobs.
