Major South African bank up for sale

Bidvest has announced that it will be restructuring its financial services division, which includes putting Bidvest Bank and FinGlobal up for sale.

The “strategic restructuring” will impact Bidvest Financial Services division, which provides banking and related products and services to South African corporates, businesses and consumers.

This division includes Bidvest Bank and FinGlobal, as well as short- and long-term insurance products through Bidvest Insurance, Bidvest Life and Compendium.

The group noted that the division’s post-pandemic financial performance has been strong, evident in the FY2023 annual and FY2024 interim results, “and this positive momentum is continuing in subsequent trading”.

Chief executive Mpumi Madisa said the restructuring of Bidvest Financial Services will allow the group to set its businesses up for the “next phase of sustainable expansion” whilst recycling capital to position the group for continued growth.

To do this requires a strategic shift, where its ambition is to “achieve scale and growth” and pursue organic and acquisitive growth opportunities in the Group’s identified areas of focus—in niche services of hygiene, facilities management and distribution of plumbing and related products.

“Considering the overall Group strategy and notwithstanding the solid performance of the Financial Services division, the Bidvest Group Board of Directors believes that dedicated financial services ownership is required for the continued sustainability and prosperity of some of the companies in this division.

“Shareholders are therefore advised that the Bidvest Group Board has approved a process to dispose of Bidvest Bank and its related entity, FinGlobal,” it said.

The remaining short-term insurance businesses within the Financial Services division focus primarily on vehicle insurance coverage and related value-added products. These businesses will be transferred to the Automotive division.

“This aligns with this division’s strategy of diversifying into allied automotive services,” it said.

The disposal of Bidvest Life, which has been previously announced, is underway.

Post this disposal process, the Group will comprise of six divisions, namely:

• Services International
• Freight
• Services South Africa
• Commercial Products
• Branded Products
• Automotive

Adcock Ingram remains a majority-owned Bidvest subsidiary company.

What comes next

Bidvest said the formal disposal process for Bidvest Bank and FinGlobal will be launched imminently, with management looking to identify a suitable acquirer by the end of 2024.

“The transaction will be subject to several relevant regulatory approvals. The Bidvest Group will honour its responsibility to ensure that Bidvest Bank remains financially sound and operationally stable during this transition period,” it said.

“The well-being of employees and maintaining high-quality service standards for all clients will remain priorities.”

In FY2023, Bidvest Bank generated trading profit and operating income of R234 million and R219 million, respectively.

The Bidvest Bank book, which consists mainly of leased assets, loans and advances, totalled R5 billion funded by deposits of R8 billion.

Cash and investment securities amounted to R6 billion, which included restricted cash of R4 billion, from a Group perspective.

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