TURNAROUND STRATEGY: African Bank takes a leap into business banking with R1.5bn acquisition of Grindrod Bank

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The landmark acquisition will see African Bank return to its true calling three decades after the bank was formed in 1964 – servicing small business.

African Bank has announced its intention to acquire 100% of Grindrod Bank for R1.5-billion, slightly less than Grindrod Bank’s net asset value of R1.67-billion.

While African Bank is unlisted, the Grindrod share jumped 9% on the news, with market commentator, The Finance Ghost, describing it as a “cute” deal.Grindrod, a listed logistics and freight operator, has long wanted to separate its freight and banking services businesses, seeing them as not complementary.

It also announced an inaugural business loan of R1.5-billion to Blue Label Telecoms, which will fund its roll-out of handsets to airtime and electricity vendors in the townships. “This means that entrepreneurs will soon have access to a support network, allowing them to focus on growing their business.”

 

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