Major South African bank sold for R2.8 billion

Bidvest has agreed to sell Bidvest Bank for R2.8 billion, with the group planning to dispose of three businesses.

Bidvest announced that it will dispose of 100% of Bidvest Bank Holdings Limited to Nigerian-based Access Bank plc.

It did note that the conditions precedent, which is normal for a transaction of this nature, relate to the required regulatory approvals.

“Bidvest will continue to support Bidvest Bank to ensure that it remains financially sound and operationally stable throughout the disposal process,” said the group.

Access Bank is a full-service commercial bank with over 60 million customers globally and is serviced through a network of over 700 branches in 23 countries across three continents.

“Through its strong presence in Nigeria, 16 subsidiaries in Africa, the United Kingdom and representative offices in China, Hong Kong, the United Arab Emirates, India and France, Access Bank employs over 8,400 people,” said Bidvest Bank.

“As a diversified financial institution, it combines a strong retail customer franchise and digital platform with deep corporate banking experience to service various markets through four business segments: retail, business, commercial and corporate.”

“Access Bank has proven risk and capital management capabilities. As of the last reporting period ended 31 December 2023, Access Bank’s shareholders’ equity exceeded US$1.7 billion with customer loans and deposits of US$6.0 billion and US$12.5 billion, respectively.”

Access Bank has operated in South Africa since 2021 following its acquisition of Grobank Limited.

In South Africa, its strategy has expanded to align with the vision of becoming the gateway to Africa, and and the world’s most respected African bank.

The disposal price of Bidvest Bank is roughly R2.8 billion. The proceeds will then be used to settle the existing Bidvest debt.

Access Bank also intends to introduce Broad-Based Black Economic Empowerment ownership, including an Employee Stock Ownership Plan.

Bidvest’s management expects the regulatory approvals to take six months to achieve, which implies an expected effective date before the end of the current financial year.

In FY24, Bidvest Bank generated trading profit and operating income of R371 million and R377 million, respectively.

The Bidvest Bank book, which mainly consists of leased assets, loans and advances, totalled R6 billion, which is funded by deposits of R8 billion.

Other deals

Bidvest also announced that it had reached an agreement to dispose of 100% of FinGlobal to Momentum Group.

“FinGlobal’s unique financial emigration solutions offered to South African expatriates will benefit from the scale and complementary capabilities of the acquirer. All employees will be retained as part of the transaction,” said Bidvest Bank.

“Regulatory approvals form the key conditions precedent required to finalise this transaction.”

Bidvest is also in the possession of binding offers from existing life insurers for 100% of Bidvest Life. The group said that one of these offers will be advanced to an agreement in the coming weeks.

“Bidvest Bank, FinGlobal and Bidvest Life will be disclosed as a Disposal Group held for sale in the consolidated Bidvest financial statements for the financial year, which commenced 1 July 2024.”

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