South Africa's Saambou Bank is sold

Saambou's microlending business will not be sold

All the 2,000 workers at South Africa's seventh largest bank are expected to lose their jobs after the business was sold to a competing bank.

Firstrand has told Saambou's account holders that their savings are safe

Firstrand Bank Holdings has agreed to pay an estimated 12.8bn rand ($1.26bn; £860m) for Saambou Bank, three months after it was placed under receivership.

Firstrand has promised to give all Saambou Bank's 520,000 account holders full access to their cash with interest.

"It is business as usual from next week," said Firstrand executive Wendy Lucas-Ball.

Bankruptcy fears

Saambou Bank customers were denied access to their accounts in February when South Africa's central bank, the Reserve Bank, forced the bank to freeze all deposits.

The order came after bankruptcy fears had spurred savers to withdraw more than 1bn rand in a week.

Worries about the bank's health arose because it had amassed vast bad debts in its microlending business, which lends small sums to individuals and small businesses.

Microlending excluded

Firstrand will take over all Saambou's accounts and home loans.

Saambou previously held a 5% share of the country's retail savings market.

Saambou's microlending business and all other assets and liabilities were excluded from the deal.

The freezing of Saambou's accounts in February came less than a month after the country's number one retail bank, Absa, was hit by news that its small loans arm has run up 1.5bn rand in bad debts in the microlending segment.

Microlending is a key growth segment of South Africa's financial sector, given the huge number of small, often black-owned businesses surviving on slim assets and low incomes.

About 60% of South Africa's 43 million-strong population have no bank account.