Big South African bank for sale

Bidvest Financial Services is undergoing a restructuring, which involves disposing of Bidvest Bank and FinGlobal.

The company released a SENS announcement this morning, stating that it is undergoing a strategic shift, streamlining its operations by divesting its Financial Services division. 

This means selling Bidvest Bank and FinGlobal to concentrate on their core competencies in hygiene, facilities management, and plumbing product distribution. 

“The opportunity to facilitate a step-change in value-creation for all stakeholders does not arise often,” CEO Mpumi Madisa said. 

“The strategic restructure of Bidvest Financial Services allows us to set these businesses up for their next phase of sustainable expansion whilst recycling capital to position the group for continued growth.” 

Bidvest’s Financial Services division provides banking and related products and services to South African corporates, businesses and consumers through Bidvest Bank and FinGlobal.

The division also offers short- and long-term insurance products through Bidvest Insurance, Bidvest Life, and Compendium.

The division’s post-pandemic financial performance has been strong, evident in its 2023 annual and 2024 interim results, and this positive momentum is continuing in subsequent trading.

“The Bidvest Group’s strategic ambition is to achieve scale and growth by maintaining a strong balance sheet and exercising financial discipline through considered capital allocation,” Bidvest said.

It includes pursuing organic and acquisitive growth opportunities in the Bidvest Group’s identified focus areas.

The group aims to expand its blend of defensive, cyclical and growth assets through capital investment in key strategic areas.

This is to ensure continued growth in South Africa and internationally in niche services of hygiene, facilities management and distribution of plumbing and related products.

Bidvest’s board of directors said dedicated financial services ownership is required for the continued sustainability and prosperity of some of the companies in this division.

“Shareholders are therefore advised that the Bidvest Group Board has approved a process to dispose of Bidvest Bank and its related entity, FinGlobal,” the company said.

The remaining short-term insurance businesses within the Financial Services division focus primarily on vehicle insurance coverage and related value-added products. These businesses will be transferred to Bidvest’s automotive division. 

“This aligns with this division’s strategy of diversifying into allied automotive services,” the company explained.

The disposal of Bidvest Life, which has been previously announced, is also underway.

After the disposal process, Bidvest will comprise six divisions: Services International, Freight, Services South Africa, Commercial Products, Branded Products, and Automotive. Adcock Ingram will remain a majority-owned subsidiary of Bidvest. 

“This strategic restructure facilitates the recycling of capital to support continued growth,” Bidvest said.

The formal disposal process for Bidvest Bank and FinGlobal will be launched imminently, and Bidvest’s management will attempt to identify a suitable acquirer by the end of 2024. 

“The Bidvest Group will honour its responsibility to ensure that Bidvest Bank remains financially sound and operationally stable during this transition period,” it said. 

“The well-being of employees and maintaining high-quality service standards for all clients will remain priorities.”

In its 2023 financial year, Bidvest Bank generated trading profit and operating income of R234 million and R219 million, respectively. 

The Bidvest Bank book, which mainly consists of leased assets, loans, and advances, totalled R5 billion, funded by deposits of R8 billion. Cash and investment securities amounted to R6 billion, which included restricted cash, from a group perspective, of R4 billion.