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Cape Town – The National Empowerment Fund (NEF) has not approached Mercantile Bank or its holding company, Caixa Geral de Depositos (CGD), to express interest in purchasing Mercantile Bank.
That is according to an official statement by Mercantile Bank on Wednesday, following the NEF’s presentation at Parliament’s hearing on economic transformation in the financial sector.
NEF CEO Philisiwe Mthethwa said the fund is considering an offer of R12.2bn for Mercantile Bank, which the Portuguese bank CGD this month announced it is selling.
“This is low hanging fruit that could be scaled up. It addresses the need of (establishing) black entrepreneurs,” Mthethwa said.
Her presentation pointed to the option of buying "100% of the bank for a black bank".
Mthethwa said the source of funding to buy Mercantile Bank would come from the Public Investment Corporation, the NEF and a black public participation initial public offering (IPO).
Mercantile Bank said it “is mindful of the need for increased transformation in the financial services sector and, as a bank, is committed to black economic empowerment”.
“The Mercantile Bank Limited Board of Directors believes that the impending sale creates an opportunity for Mercantile to have representation at a shareholder level for black investors.
“We wish to reiterate that our board of directors will only support a transaction that benefits our stakeholders, most important being our staff and clients.”
Mercantile Bank said it “is aware of comments made by the National Empowerment Fund today at the second round of hearings in Parliament on transformation in the financial services sector”.
“CGD and Mercantile Bank will follow a very strict and transparent sale process both here in South Africa and in Portugal,” the bank said.
“Although there has been significant interest from potential buyers, we cannot presently divulge any further information relating to other interests expressed as the sale process has not yet formally begun.
“CGD is in the process of appointing advisors to run with the sale process, which would include identifying and holding discussions with potential buyers. The sale process is expected to take up to 12 months to conclude.”
Fin24 reported last week that Mercantile Bank could present an opportunity to be transformed into a black-owned bank. Fin24 asked Mercantile Bank CEO Karl Kumbier whether this would be an opportunity for black investors, especially in the light of the heightening narrative of radical (or inclusive) economic transformation.
“It’s definitely an opportunity, a massive opportunity,” he said at the time.
“From a board level, we haven’t had a discussion as such, but we definitely had a discussion that this is an ideal opportunity to have a decent black economic partner in the bank (with) a decent share in the bank, to help us transform the bank as a whole.”
Mthethwa said on Wednesday the other option is to become a 51% shareholder of Mercantile Bank. This organic model would see the bank being 51% owned by the black public and 49% owned by government. It would see an initial capital outlay of about R306m (R150m from government and R156m from the black public).
