In case you ever asked yourself some random facts on Africa. And you wondered which one is the oldest bank in Africa. First National Bank (FNB) is the oldest bank in Africa.
First National Bank from South Africa traces its origins back to the Eastern Province Bank which was formed in Grahamstown in 1838. The wool export boom in the province saw the bank performing well, and by 1874 four branches had been opened at Grahamstown, Cradock, Queensburg and Middelburg. Due to a recession the bank was bought out in 1874 by the Oriental Bank Corporation (OBC). However, as a result of financial difficulties that the Oriental Bank Corporation was experiencing in India, it decided to withdraw from South Africa and thus the Bank of Africa was formed in 1879 to take over the OBC’s business in South Africa.
The discovery of gold in Witwatersrand and Barberton evoked a desire by the South African government to establish a local commercial bank. The government thus created a bank through a concession agreement. The task of the bank was to focus primarily on financing agricultural development. A state mint was also established as part of the concession. The Nationale Bank der Zuid-Afrikaansche Republiek Beperk (National Bank of the South African Republic Limited) was registered in Pretoria in 1891 and opened its doors for business on 5 April of the same year. After the conclusion of the Second Anglo-Boer War in 1902, the name of this bank was changed to the National Bank of South Africa Limited.
Due to another recession, the Bank of Africa was bought out by the National Bank in 1912, which had already bought out another bank, the National Bank of the Orange River Colony in 1910. The Natal Bank, which was founded in 1854 to fund the Natal Colony’s sugar industry, also suffered financial difficulties and was taken over in 1914. By this time, the National Bank was now one of the strongest and largest banks in South Africa.
However, by the early 1920s, the National Bank was suffering from bad debt and heavy losses. It consequently merged with the Anglo-Egyptian Bank and the Colonial Bank in 1925 to form Barclays Bank (Dominion, Colonial and Overseas). In 1971 Barclays restructured its operation and its South Africa operation was renamed Barclays National Bank Limited.
Due to a disinvestment campaign against South Africa because of its apartheid policies, Barclays was forced to reduce its shareholding and sold its shareholding in the bank in 1986. The bank was renamed “First National Bank of Southern Africa Limited” in 1987 and became a wholly South African owned and controlled entity.
In 1998, the financial services interests (which included their shareholding in First National Bank) of Rand Merchant Bank Holdings and Anglo-American Corporation were merged to form First Rand Limited, which is listed on the JSE Securities Exchange. In consequence, FNB became a wholly owned subsidiary of First Rand Limited; it currently trades as a division of FirstRand Bank Limited.
In 1999 the First National Bank was mentioned in the ‘Ciex Report’ that summarised a two-year long investigation into the theft of R26 billion from the state during the apartheid era. The investigators claimed that FNB unlawfully received hundreds of millions of Rands from the SARB. The money was disguised as ‘lifeboats’ for covering bad loans. True to 2017 the stolen funds have yet to be recovered.
FNB is one of the three major divisions of the First Rand Group, and the others being Rand Merchant Bank and Wesbank. First National Bank maintains banking subsidiaries which it owns wholly or in part, in Botswana, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia, Ghana, India, Lesotho and Guernsey. FNB is also actively pursuing expansion plans in Angola and Nigeria. Media reports in May 2012, indicated that the bank is also making plans to expand into Kenya, Rwanda and Uganda.