JOHANNESBURG – Capitec Bank on Thursday won the race to buy Mercantile Bank in a R3.2 billion deal. Capitec says the deal will allow it to offer compelling products to small businesses.
“The Board of Capitec Bank believes there are many opportunities in the market to serve small-to-medium enterprises and owner-managed businesses better, and the bank has commenced with a strategy to develop infrastructure to facilitate same,” Capitec says.
Mercantile’s core business offer is business banking for small- to medium-sized enterprises and entrepreneurs. The race for Mercantile was sparked by a decision by the Portuguese earlier this year to divest from non-core operations outside of Portugal as part of its recapitalisation plan.
Capitec saw off stiff competition from the cash-rich Public Investment Corporation, Nedbank and smaller Grindrod Bank.
Karl Kumbier, chief executive of Mercantile Bank, says he is very excited that Capitec has chosen Mercantile as its partner to build the best business bank in the country.
“The timing of the sale could not be better and Capitec being selected as the preferred bidder is a fantastic result. I think Capitec will be an amazing partner. We are proud that a bank of Capitec’s stature has decided to buy Mercantile instead of trying to build a business bank from scratch,” says Kumbier.
Capitec, which burst on to the scene in 2001 as a micro-lender, in September said it had attracted nearly 110 000 new clients each month for the six months ended September to end the period with 10.5 million customers.