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Ubank began as a savings fund that provided neglected mine workers with basic financial services, writes Luthando Vutula
The year 1976 in South Africa has largely been viewed through a political lens commemorating the courageous youth who stood up and protested against Bantu education.
But the importance of the year is not exclusive to the political calendar.
On the commercial side, South Africa’s black-owned commercial bank, Ubank, conducted its first transaction.
It had begun as a savings fund in 1975 aimed at providing neglected mine workers in the gold and platinum belts with basic financial services.
Another milestone in the area of commerce for black people was the achievement by Professor Wiseman Nkuhlu, who qualified as the first black African chartered accountant in South Africa in 1976.
Ubank previously operated as Teba Bank and, before that, as Teba Cash Financial Services. It was established when many black people did not have access to financial services.
A year before the birth of Ubank, the National African Federated Chamber of Commerce started African Bank to operate as a savings and loan institution servicing black people who needed credit and an opportunity to save.
Ubank was born out of The Employment Bureau of Africa (Teba), which was involved in the recruitment of black migrant labour for the South African mining industry.
The bank is owned by a trust managed by trustees elected by the majority union – the National Union of Mineworkers – and the Chamber of Mines. The beneficiaries of the trust are workers who are also customers of the bank.
Ubank was started at a time when black mine workers’ financial needs were underserviced. In those days, there was no cellphone or internet banking. Workers needed an entity that could facilitate the remittance of funds to their dependants in rural areas.
Mines were also situated in outlying areas, making it difficult for workers to access banking services in urban areas. The low wages earned by mine labourers had made it unattractive for large commercial banks to roll out proper banking branches at the mines.
Ubank saw it as morally correct to operate branches on mine premises, in mining towns and in the rural areas where workers came from.
In 2000, Ubank became a fully fledged retail bank after being granted a banking licence by the SA Reserve Bank. In its third decade – in 2006 – it had grown its savings deposit base to about R1.6 billion and was servicing more than 500 000 mine workers.
The opening of branches on mine premises saved workers a lot of money, including transport costs to the towns. As a primary bank for mine workers, it protected many workers who could potentially have fallen prey to unscrupulous loan sharks.
On the other hand, it gave workers an opportunity to save their money in a safe and trusted entity.
In its history, the bank has continued to try to grow beyond serving the mining community. In 2008, it made an attempt to buy black-managed Meeg Bank, which was led by Nkuhlu and Darwin Nkonki. However, the deal did not go through because Meeg Bank was taken over by Absa.
In 2010, it dropped the Teba Bank brand for Ubank as part of its attempt to serve people outside mining communities. Diversifying beyond banking mine workers continues to be its strategy.
In its history, Ubank has not just operated as a bank that simply accepts deposits and advances credit, such as home loans, it has been instrumental in ensuring that mine workers and beneficiaries receive their pension and provident fund payouts.
It has also been involved in tracking and tracing beneficiaries in rural areas, with fieldworkers physically knocking on doors.
The bank has paid millions of rands to the Teba Fund Trust for social development activities, including launching the Teba Bank bursary fund with the JB Marks Education Trust Fund.
Over the past 40 years, Ubank has managed to remain owned and managed by black people at a time when
financial services firms such as African Bank, Meeg Bank and Future Bank fell out of black control. This is something to be proud of.
Ubank has truly defined what it means to be a black bank, not just through ownership and management control, but through the way it operates and serves its clients.
Ubank continues to be part of many mining and black communities, with its staff servicing customers in the African languages spoken by clients in their respective geographies.
Ubank is proud of its 40 years of service, and it is currently involved in raising capital to better service its current and future customer base. It also intends to invest significantly in technology, product development and distribution networks.
Vutula is Ubank CEO
