TEN years after obtaining a banking licence, Teba Bank, which has been providing financial services to mineworkers and their families, will be expanding its services outside the mining industry.
With the R50 million launch of the new-look brand in the next three weeks, Teba will throw away its "underground by design" image and compete with other banks of its size.
Teba is not listed but its executives believe the bank is the ninth-largest by assets in South Africa with deposits of R3.5 billion, and the eighth most recognised banking brand in the country. JSE-listed niche bank Sasfin is rated South Africa's eighth biggest bank.
Teba has 500 000 clients, of whom 90 percent are miners.
Chief executive Mark Williams said the bank was planning to introduce a suite of high demand products for "new" worker markets.
He would not reveal details, saying these would be available when the company launched its new brand and strategy. He said the branch network would also be revamped.
"We have seen that focusing on mineworkers and rural communities limited the space within which we had to operate. It was a non-competitive idea and had to move," Williams said.
Teba Bank managing executive Mohamed Saloojee told Business Report that the bank would not tackle established banks head-on.
"We are going to come up with unique solutions rooted in the value-for-money principles," Saloojee said.
A Johannesburg-based banking analyst, who did not want to be named, said the bank's new strategy could only work if Teba hired management from its competitors like African Bank, South Africa's biggest provider of unsecured loans, and low-cost bank Capitec.
"Have they got the experience to venture outside of their own territory? Because they do not have that experience, there might be pitfalls awaiting them," the analyst said.
Another two analysts declined to comment on Teba's new venture because the bank was not listed.
The bank's balance sheet last year grew by a sturdy 17 percent to a little more than R3bn, surpassing the 13 percent growth reported in 2008. This was on the back of continued focus on cross-selling in its existing markets.
The good performance was achieved despite tougher conditions in the company's key markets of gold and platinum mining.
It was recently reported that the National African Federated Chamber of Commerce and Industry (Nafcoc) was in talks to buy a stake in Teba Bank.
Nafcoc had indicated that it wanted to acquire a 15 percent stake in one of South Africa's banks in an effort to tap into the mass market, which had been ignored by more established banks.
Williams was non-committal about whether the talks with Nafcoc did occur or not. "We have been talking to many of our friends," he said.