Thankfully we don’t need another crisis to be reminded that banking is a tough old business.
About two dozen years ago local investors — who might have thought the big four banks of that day a tad complacent — backed more than a few new banking initiatives. The JSE saw the listing of Fulcrum Science & Technology Bank, Regal Treasury and The Business Bank (TBB), along with specialist investment banks and microlenders. But a little nervousness among depositors — fanned by excitable media reports — meant the lot were practically sunk. Most investors were left carrying a sack of tears, though TBB’s banking licence was eventually used by a promising little upstart called Capitec Bank.
Last week Bidvest, one of the toughest operators around, opted out of its specialist banking endeavours. Bidvest Bank — encompassing business banking, fleet management financing, foreign exchange and trade finance — might once have been regarded as a contender. But the requisite bulk-up would have required serious investment and a flurry of dealmaking. Bidvest clearly has other plans, which seem to involve refocusing more sharply on its traditional strengths in industry niches.
Finding a buyer for these banking assets might not be that easy. African Bank — revitalised and ready for a relisting on the JSE — snapped up Grindrod Bank and Sasfin’s capital equipment financing and commercial property finance loan books. Bidvest Bank, on paper, would slot neatly into African Bank’s determination to corner a slab of the business banking market.
Whether African Bank would want to pursue another sizeable deal is debatable. Capitec, which acquired Mercantile Bank in 2019, seems an illogical suitor for Bidvest Bank. But you never know.
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