Shivers in big four as Capitec gets into business banking

Business

Shivers in big four as Capitec gets into business banking

Purchase of Mercantile, serving small and medium-sized businesses, is a coup for the consumer bank

Warren Thompson


Capitec has bought Mercantile Bank in a deal that will give one of SA’s biggest banks access to the business market.
The Portuguese government announced earlier in 2018 that state-owned bank Caixa Geral de Depósitos would be restructured, and this meant that its stake in Mercantile bank would be sold. Capitec was one of four banks to be shortlisted to bid in June.
“Through hard work, we have achieved great results in a tough economic environment and have been ranked number one in service for business and commercial banking for four years in a row. Unfortunately, we can only grow so much organically and we need something new to take us to the next level,” said Mercantile CEO Karl Kumbier.
He said Capitec will be an “amazing partner” for Mercantile.
“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,” said Kumbier.
The sale remains subject to approval by the Prudential Authority and the Competition Commission.
Capitec has previously indicated it wants to move into business banking, with CEO Gerrie Fourie saying that “build or buy” the bank will look to launch a product in 2019. The acquisition should accelerate this process.
Kumbier added that Mercantile’s experience and expertise in serving small and medium-sized businesses will bring great value in targeting this generally under-served market.
“We believe that combining Capitec’s brand, its ability to scale, and its experience in disrupting the consumer banking market with Mercantile’s experience and skill in business banking will allow us to build a world-class business banking offering that will evolve to consistently address the unique needs of all South African entrepreneurs,” he said.

This article is reserved for registered Times Select readers.
Simply register at no cost to proceed. If you've already registered, sign in below.

Times Select

Already registered on TimesLIVE, BusinessLIVE or SowetanLIVE? Sign in with the same details.

Questions or problems?
Email helpdesk@timeslive.co.za or call 0860 52 52 00.

Next Article

Previous Article