CEO: June D-day as 60 suitors line up to buy SA's Mercantile Bank | Fin24
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CEO: June D-day as 60 suitors line up to buy SA's Mercantile Bank

Mar 07 2018 15:53
Jan Cronje

Cape Town - There have been about 60 expressions of interest from foreign and South African buyers to purchase SA's Mercantile Bank, according to its CEO Karl Kumbier.

Speaking to Fin24 on Wednesday about the bank's 2017 financial results, Kumbier said that Mercantile Bank, which focuses on entrepreneurs and small and medium-sized enterprises (SMEs), would have a new owner by June this year. 

The bank's net profit after tax grew 20% to R213m in 2017, while its deposits increased 10% to R9.3bn. The CEO said that while 2017 was a tough year for the SA economy, the results showed the bank had experienced a "fantastic run". 

Mercantile is 100% owned by Caixa Geral de Depósitos (CGD), the largest bank in Portugal. The Portuguese government, which owns CGD, previously gave the green light for the bank's sale. 

CGD is selling Mercantile Bank as part of its recapitalisation process, which also includes offloading non-core banks in Spain and Brazil. 

Kumbier said the tender process would be "very transparent".


Interested bidders 

He said the next stage in the process was for interested bidders to put in non-binding offers and pitch documents for the bank. 

This would include providing information about shareholders, as well as balance sheets, empowerment credentials and their plans for Mercantile's staff, management and business strategy. 

"Those bidders all go through a a scorecard, and then Deutsche bank and Caixo select a shortlist form that scorecard. All the bids have to be in by March 15," he said.  

The shortlist is then run past Mercantile's board, and the government of Portugal. 

It will be made public sometime in April, said Kumbier.

Binding offers are set to be presented in May, and the bank's new buyer announced in June 2018.

Kumbier said the final buyer would then need to get local approval from the Competition Commission, the SA Reserve Bank and the minister of finance. 

"Any transaction would have to have an empowerment angle to it, that is my personal view," he said. "I think it is a really nice opportunity to create an empowered bank". 

Back on the bourse? 

Mercantile was listed on the JSE until 2012, when it delisted. Kumbier said once the bank had a new owner, it would again consider listing on the local stock market.

"Depending in the buyer, it might be an option to once again list again in four or five years time," he said.  

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mercantile bank  |  finance  |  banking sector  |  sa economy


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