Banking and financial services

African Bank is on the acquisition trail.

African Bank has signalled that it is ready to grow, with an agreement to buy Grindrod Bank and an R80million deal to purchase lender Ubank.

After going into administration in 2014, African Bank took some time to recover and is still half-owned by the Reserve Bank but it has materially added to its retail client base and the addition of more than 4.5-million clients with the purchase of the troubled Ubank, which had as its base mine workers, will further strengthen its position. The R1.5billion purchase of Grindrod Bank gives African Bank a stronger position in business lending.

Consulting company Bain & Company has been excluded from British government contracts for three years because of the role the company played in the evisceration of the South African Revenue Service in the time of state capture. Although the Zondo Commission on state capture found that KPMG and McKinsey also enabled state capture, no such strictures have yet been applied by the South African government.

Discovery Bank reported in June 2022 that it was signing up 750 new clients every day which puts it on course to achieve more than 600 000 customers by 2024. The bank, which launched in 2019, has already opened more than one-million accounts. Early in 2022, longterm insurer and asset manager Liberty delisted from the JSE and was integrated into the Standard Bank Group.

The New Development Bank, established to fund infrastructure projects in BRICS countries, had approved loans of $5.1-billion to be spent in South Africa by July 2022. This included renewable energy projects and the Port of Durban upgrades.

The launch by Sanlam Investments of a Sustainable Infrastructure Fund is a sign of the times. The South African state has promised a huge infrastructure drive but in the context of climate change caused by the use of fossil fuels, the investment community is increasingly putting emphasis on sustainability. Sanlam Group will invest R6-billion in the fund and aims to attract a further R5-billion from institutional investors. Investments will be made in housing, transport, health, water, waste, communication, conventional energy

SECTOR INSIGHT Advisory companies that enabled state capture are facing sanctions. and renewable energy, a fastgrowing sector with enormous potential. Naspers Foundry is one of several investment funds looking for opportunities in the financial sector. Insurance technology is of particular interest, together with credit services and payment systems. Capital Appreciation, which is part-owned by the Public Investment Corporation, is already invested in a software developer, a credit card payment terminal provider and has R500-million available for further investments. African ONLINE RESOURCES Rainbow Capital has a stake in Financial Sector Conduct Authority: www.fsca.co.za Insurance Institute of South Africa: www.iisa.co.za the investment company and is the owner of TymeBank, which South African Institute of Chartered Accountants: www.saica.co.za received a banking licence in 2017 and is expanding rapidly. ■

Banking and finance Mutual banks have been granted licences.

Ubank, with a history of catering to mineworkers, was found by the South African Reserve Bank to have an unacceptable capital adequacy ratio in May 2022 and was consequently placed under curatorship.

Teba Trust Fund, which owns Ubank, was actively seeking a strategic investor when the curatorship was announced. The administrators of the fund are the National Union of Mineworkers (NUM) and Minerals Council SA. One of the banks being courted was the South African arm of Nigeria’s Access Bank Group and Minerals

Council SA remains positive about the future of the bank.

Despite the collapse of VBS Mutual Bank in 2018, the appetite for mutual banks is strong, given the nature of the South African market. The

Young Women in Business Network (YWBN) has been granted a mutual bank licence and Bank Zero also intends to use the mutual model.

Tyme Digital went from acquiring a licence to running TymeBank with services available in more than 500 Pick n Pay and Boxer stores in less than two years.

Second to market among the country’s new banks was Discovery

Bank, which officially launched in 2019 and is experiencing rapid growth in retail deposits. Discovery Bank is applying the behavioural model it uses in its health business to reward good financial behaviour. The Discovery group is already a giant on the JSE with