THE Development Bank of Southern Africa (DBSA) will scale down its equity investments portfolio as it aims to return to profitability, a senior executive said on Tuesday.
The decision follows a spate of bad equity decisions that hurt the bank, which reported a R370m loss last year.
DBSA CEO Patrick Dlamini said: "Equity investments were supposed to be an exception and now we have taken a decision that we are going to be thorough."
Mr Dlamini was addressing media in Rosebank, Johannesburg, during a presentation of the bank’s turnaround strategy. He said the bank was expected to play a leading role in the planned infrastructure investment programme.
"Infrastructure serves as a catalyst for growth. It cannot be business as usual, the continent requires R93bn infrastructure funding per annum. We want to make sure we are an important part of the economy and infrastructure is very important," he said.
The government has planned to spend about R845bn over the next three years, and R4-trillion over 15 years, into public infrastructure projects. The Cabinet recently approved the gazetting of a new bill aimed at fast-tracking and enhancing the co-ordination of South Africa’s planned strategic infrastructure projects.
The DBSA has already approved a total of R27.5bn, most of which (86.3%) was dedicated to South Africa for infrastructure projects in the year ended March.
The funding would be spent on a number of projects in the country.
Mr Dlamini said there was an opportunity for the bank to increase lending. He explained that the bank aimed to increase its presence in various market segments.
It wanted to grow its assets in the municipal market to R26bn by 2017 and state-owned enterprises assets to R27bn.
In the Southern African Development Community, the target was R20bn and in private-public partnerships the target was R3.5bn.
Mr Dlamini also said the management of a R9bn jobs fund to create more employment in South Africa was on track. The bank had approved R1.8bn for the fund.
"Close to R1.8bn has been approved and 62,000 sustainable jobs committed to date," he said.
Mr Dlamini acknowledged that with the new restructuring process, staff would be retrenched and corruption would not be tolerated.
"We can no longer allow the DBSA to be associated with shoddy work, we need to restore the pride of our people because we believe our people deserve better," he said.
The DBSA has announced a voluntary retrenchment process.
It has been reported that the bank aims to reduce its staff count from 750 to 300.