Capitec has completed its acquisition of Mercantile Bank after making its final payment on Thursday (7 November), the bank said in a statement.
Capitec said that it purchased Mercantile as it ‘believes there’s an opportunity to offer a business banking solution, which is based on the same fundamentals that made Capitec successful in the retail banking sector’.
“This applies to any business needing a no-frills digitally-led banking solution.
“The acquisition of Mercantile will fast track the bank’s objective to expand its focus to a broader bank strategy,” it said.
It added that Mercantile’s core business offer is banking for established small to medium-sized enterprises and entrepreneurs, which means it is well-positioned to align with Capitec’s business banking strategy.
Mercantile was offered for sale by its shareholder, Caixa, a Portuguese bank, due to it divesting from non-core operations outside of Portugal as part of its recapitalisation plan.
Before the deal could be finalised, regulatory approval had to be obtained from the Competition Commission, the South African Reserve Bank and the Minister of Finance.
All regulatory approvals and contractual conditions were met on 9 October 2019.
The sale was finalised and Capitec paid R3.56 billion for Mercantile. and 7 November was the first official day that Mercantile became part of Capitec, the bank said.
Capitec said that for now the two banks will be run independently with retail clients served in Capitec branches and Business Banking clients referred to Mercantile.
“We believe our acquisition of Mercantile will create exciting opportunities for both Mercantile and Capitec employees.
“Our need for skilled people will significantly increase to achieve our desired growth,” it said