This emerged when the bank's annual results were presented in Umlazi. In addition, R54,5-million was written off in bad debts from the company's loan book.
Ithala says that it has now stopped lending money to politicians and their relatives and points out that the unnamed politicians who remained on its loan book still owed the bank R27-million.
It seems there were a number of costly decisions made by Ithala, costing it an enormous amount of money. For instance it had funded Dolphin Whispers, a residential project in Durban's Point area to the tune of R83,4-million but the project was halted because of poor workmanship and project management.
Ithala has confirmed that it is still wrestling with how to resolve the Dolphin Whispers project and says it will cost the group another R25-million to convert the residential block into offices.
Ithala says it also lost millions on a residential project developed by Zee Net Trading at Umdloti where R55,2-million was put into this development, which was never completed. Zee Net has subsequently been sold on auction.
Acting-chief executive, Simphiwe Madondo says that despite the challenges being faced by the bank, it had extended more than R577-million in loans to established and emerging businesses and its banking arm had attracted deposits totalling R1,7-billion and advanced a further R1,6-billion.
Read the full article on www.iol.co.za.
View the Ithala Annual Report 2011.
