African Bank Limited, a leading retail bank run by South African business executive Kennedy Bungane, has successfully completed a comprehensive takeover of Sasfin Bank Limited.
The acquisition, worth R3.2 billion ($166 million), includes Sasfin Bank’s Capital Equipment Finance Business (CEF Business) and Commercial Property Finance Business (CPF Business).
The statement today marks the end of a journey that began with the binding heads of agreement published on October 13, 2023. The acquisition is consistent with the bank’s ‘Excelerate25′ strategy, which focuses on growing its core and developing a presence in the business banking market.
The finished agreements, signed on February 16, 2024 (as amended) and February 22, 2024, demonstrate the parties’ determination to manage the complexities of this complicated transaction. The transaction’s adjusted composite value of roughly R2.9 billion ($150.5 million) strengthens African Bank’s position as a significant participant in capital equipment and commercial property loan sectors.
Based on valuations as of October 31, 2023, the CEF Business is valued at roughly R2.61 billion ($135.4 million), including the advances book and a goodwill component. Simultaneously, the CPF Business is valued at around R290.2 million ($15.1 million), which includes the advances book and any associated profit shares. This large acquisition strengthens African Bank’s presence in several critical financial sectors.
The acquisition price for both firms will be paid in two installments. 93% of the expected loan book value will be settled on the closing day, demonstrating African Bank’s commitment to quickly integrating these firms. The remaining 7% will be paid no later than 120 calendar days following the Closing Date, exhibiting sound financial preparation.
African Bank’s successful acquisition of Sasfin Bank’s Capital Equipment and Commercial Property Finance businesses demonstrates the company’s commitment to strategic expansion and diversification, establishing it as a major participant in South Africa’s financial scene.
Bungane has led African Bank Limited to significant growth, making it one of South Africa’s fastest-growing financial services businesses.
Active customer numbers increased from 1.54 million in the preceding fiscal year 2022 to 3.97 million in the year ending September 30, 2023. This expansion was aided by the addition of the business bank and alliance banking divisions.