African Bank has ramped up its spending spree, emerging as the preferred bidder for Eskom’s staff home loan book and assets, in a deal expected to be sealed by May 2025.
The deal marks a significant milestone for both companies, though for different reasons. For Eskom, the deal fulfils one of the conditions imposed by National Treasury in a R254bn debt relief package to the entity. For African Bank, it strengthens its foothold in the secured lending space.
The lender, led by Kennedy Bungane, said the transaction will be subject to various conditions, including board and regulatory approvals.
“In line with African Bank’s Excelerate25 strategy, the integration of the R5.7bn home loan book and leveraging off Eskom established infrastructure and relationships, this acquisition aims to diversify African Bank’s product offering and increase its capabilities and presence in the secured home loan lending market,” the bank said.
The deal involves Eskom Finance Company and Nqaba Finance 1. Nqaba was incorporated in 2005 and buys eligible mortgage loans originated and serviced by Eskom Finance Company.
Launched in 2021, African Bank’s Excelerate25 strategy makes a case for a scalable, diversified and sustainable business with a compelling listing proposition.
African Bank last year set its sights on the lucrative home loans market and a pilot project for its staff is under way, CFO Anbann Chetti said
African Bank, which expects to list on the JSE in 2027, has been bulking up its portfolio over the past three years.
The company bought Grindrod Bank for R1.5bn in May 2022, accelerating its entry into the SA business banking sector. The transaction introduced more than R12.5bn in funding liabilities — most of that is business deposits — which are new to the group.
That was followed by the R3.2bn purchase of Sasfin Bank’s commercial equipment finance and commercial property finance units.
African Bank has three main sources of funding, including bonds issued under its domestic medium-term note programme that are listed on the JSE. It also has a euro medium-term note programme. Most of that paper is listed on the London and Swiss stock exchanges.
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