Bidvest CEO Mpumi Madisa says the group is on track to dispose of Bidvest Bank before the end of this year, with more than 60 suitors having shown interest in buying the asset.
The industrial conglomerate in July sounded out the market for a potential buyer for its financial services assets, turning its focus to its core, and more profitable, businesses.
Madisa on Monday said the group was pleasantly surprised at the huge appetite shown by potential buyers.
“Initially we had more than 60 interested parties. A majority of the interested parties are SA financial services companies, with one or two offshore. We have gone through a shortlisting process where we asked for expression of interest,” Madisa said.
“We have brought down the number of interested parties. I am comfortable that the people we have in the room can actually do a transaction, they have unencumbered capital.
“All the companies on the shortlist are financial services businesses and we are now going through a process of engaging with the regulator, putting together our information memorandum and getting ready for them to be able to do a full due diligence.”
Bidvest Bank offers business banking, fleet finance and management, forex and trade finance. Apart from Bidvest Bank, the group is also selling FinGlobal while the Bidvest Life sale process is continuing.
The group’s financial services business reported a 38.6% surge in trading profit to R660m in the year to end-June.
Bidvest launched its foray into banking in 1998 after acquiring the Rennies Group, which it later rebranded as Bidvest Bank. The group has over the years tried to scale the business. In 2011 it failed to acquire Mercantile Bank from Portugal’s state-owned Caixa Geral de Depositos. This was after the Portuguese authorities said Bidvest’s approach was hostile.
Mercantile Bank would later be acquired by Capitec, which renamed it Capitec Business as part of its strategy to win business banking market share.
Bidvest has reported a 6.6% rise in full-year earnings as five of its seven divisions reported profit growth, with four delivering double-digit increases.
The group reported headline earnings per share (HEPS) of 1,912.6c for the year ended June, from 1,794.8c a year ago. Revenue grew 6.7% to R122.6bn and the group recorded a trading profit of R12.4bn, up 8.5%. Profit for the year increased to R6.77bn from R6.37bn a year ago. The group declared a final dividend of 447c per share, lifting the total dividend to 914c, up 4.3%.
While five out of the seven divisions reported profit growth, the remaining two divisions — commercial products and automotive — faced headwinds due to the high renewables base and a declining new vehicle market.
To ensure a strong pipeline, Bidvest deployed almost R5bn on 11 acquisitions and growth capital expenditure, domestically and offshore. These investments added to its geographic footprint (Consolidated Property Services in Australia, RHS in Singapore), further diversified the portfolio (Interloc Freight Services, Green Home Products, Brandability), and augmented offerings through additional scale (Robinson Services, OSS Contracts, Principal Hygiene, Synergy Waste, Pure Hygiene and Roan Systems).
The group said there was an undertone of positive sentiment regarding growth in the medium to longer term. Consequently, it expected market conditions in all its operating territories to start to improve.
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