The acquisition would help them realize their business banking aspirations and would entail the bank acquiring valuable sectoral expertise and an existing customer base. The deal is the latest in an increasingly active small bank sector – the SA Reserve Bank recently put Ubank into curatorship because it faced capital constraints and Sekunjalo Investment Holdings Chairperson Dr Iqbal Survé signaled he would pay R250m to acquire Ubank if additional funding could be raised from other black funders.
Grindrod Bank, founded in 1994, had heard from several suitors over the years. The bank is currently a niche financier in the South African property market, known for its specialized expertise in commercial and industrial property finance. Grindrod Bank will provide a strong entry point into the business banking and property finance market which will grow off African Bank’s larger balance sheet and additional capital allocation. Both banks are also pursuing opportunities in the platform economy and African Bank will continue with this strategy post acquisition. The deal was expected to take some months to formally conclude and was still subject to regulatory approvals including the Prudential Authority, National Credit Regulator, Competition Authorities, and the minister of Finance. Both Grindrod Limited and Grindrod Bank believe African Bank, with its strategy of building a scalable and sustainable diversified offering across the consumer and business banking segments, is the appropriate shareholder to support Grindrod Bank’s growth strategy and is a perfect fit for its employees and clients.