African Bank Holdings Ltd. has taken a significant step in expanding its lending business by acquiring two units from a prominent South African financial services company. This strategic move comes as African Bank prepares for a proposed initial share sale in 2025. The acquisition, totaling 3.26 billion rand ($172 million), was completed through the purchase of the commercial property and capital equipment financing businesses from Sasfin Holdings Ltd.’s units, as confirmed by the company in a recent filing.
This marks the third acquisition by African Bank in a little over a year, reflecting the institution’s determination to rebuild and recover from a crisis in 2014 that necessitated a central bank bailout. The earlier acquisitions included Grindrod Bank Ltd. for 1.5 billion rand and UBank Ltd. for 80 million rand. African Bank’s Head of Business Banking, Zweli Manyathi, emphasized that these expansions are aimed at presenting a more compelling offering to the investor market. He explained, “This acquisition signifies our commitment to diversify our business banking’s revenues, asset classes, and risk profile.”
The newly acquired businesses encompass Sasfin Bank’s capital equipment finance unit and Sasfin Private Equity Investment Holdings Proprietary Ltd.’s commercial property finance division. This strategic purchase will enable African Bank to provide customers with transactional accounts, internet banking, and mobile banking options. Additionally, a team of five professionals from Sasfin, overseeing the commercial property financing business, will join the African Bank team.
African Bank has been exploring various options for shareholders, including the South African central bank, to exit its holdings. The South African Reserve Bank, in an unusual move, held stakes in the bank alongside the Government Employees Pension Fund to rescue it from the brink of collapse. The ultimate plan now involves an initial public offering (IPO) in 2025, with the central bank looking to divest its 50% stake as part of this strategic move.
African Bank’s expansion and acquisition efforts are not only a testament to its commitment to growth but also a clear signal of its determination to offer an attractive proposition to potential investors as it prepares for the upcoming IPO.
