Capitec merge with Mercantile has been approved by the Competition Tribunal
Mercantile had already developed what Capitec was looking for, says Capitec CFO André du Plessis.
The Competition Tribunal has approved, without conditions, the merger of Capitec Bank and Mercantile Bank Holdings.
Capitec currently provides limited business banking services, including point of sale devices (POS), point of sale loans, and employee salary transfer facilities.
Capitec CFO André du Plessis said that before the sale of Mercantile came to the market, Capitec has identified a need to provide business banking that is simple, transparent, accessible, affordable and with a focus on personal service.
“We had performed an in-depth needs analysis through discussion and interviews with a number of small to medium businesses. Based on this, we had begun building the foundations of our own business banking offering. However, when the Mercantile sale came to the market, we identified that the majority of the functionality and products small to medium businesses wanted, Mercantile had already developed.”
Mercantile provides business and commercial banking services along with a private banking offering through a range of specialised products and services such as electronic banking, borrowing solutions, investment and insurance solutions.
André added that:
“We performed due diligence, using both our own internal experts and external specialists, where required, and decided to proceed in making a formal bid for Mercantile. Mercantile is a strong, well-run bank with an experienced and competent management team. Mercantile has a strong focus on client service, which aligns with our core fundamentals. We believe the acquisition of Mercantile will bring our entry into the business banking market forward by at least two to three years.”
It is Capitec Bank’s stated strategy to enter the South African business banking market. Diversifying into and strengthening future growth by growing market share to include a business banking offering, with some secured lending products through the acquisition of Mercantile Holdings, is an opportunity for Capitec Bank.
“We believe there is a need in the market for business banking that is simple, transparent, accessible and affordable and with a focus on personal service. By presenting an offering that is aligned with our core fundamentals we believe we can present a differentiation in service delivery that will enable us to grow market share in the business banking sector. Furthermore, we can support the growth of small to medium businesses in South Africa, which is vital in growing the South African economy,” André said.
He concluded, saying:
“Once we have received all approvals (including regulatory approval) we will begin implementing our business banking strategy. In rolling out our business banking strategy, we will always focus on putting the client first and ensuring all clients receive exceptional personal service.”