JOHANNESBURG – After years of success in retail banking, Capitec is now positioning itself as a fully fledged bank and sees the acquisition of Mercantile Bank Holdings (MBH) as key to its diversification plans.
The company, which registered a 20 percent surge in profits to R2.4 billion for the six months ended August, said yesterday that it planned to expand its product offering to include business banking.
“This may include the acquisition of MBH, for which we submitted a formal bid on August 31. We await the outcome,” said chief executive Gerrie Fourie.
“We completed the second tranche investment in Cream Finance Holding Limited, which included existing shareholders exercising their option on September 10. This takes our shareholding to 40.25 percent.”
The bank plans to take up a third tranche “early in the next financial year”.
Mercantile, a bank owned by the Portuguese government, provides products and services in retail banking, corporate finance, asset management, equity brokerage and security.
Dispose of offshore assets
Suitors have been circling around the bank after the Portuguese authorities last year spelt out their intention to sell Mercantile as part of a plan to dispose of offshore assets.
Capitec is facing stiff competition in winning the race to buy Mercantile. The cash-rich Public Investment Corporation has thrown its hat in the ring, joined by Nedbank and smaller Grindrod Bank.
However, Capitec said it was not fazed by the competition and would proceed to establish a banking presence regardless of the outcome.
Asief Mohamed, the chief investment officer at Aeon Investment Management, said Capitec would be a formidable player in business banking.
The bank that burst on to the scene in 2001 as a micro-lender, said it had attracted nearly 110 000 new clients each month for the six months under review to end the period with 10.5 million customers.
Capitec shares closed 1.87 percent higher at R981.99 on the JSE yesterday.