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National Empowerment Fund mulling offer to create black-owned bank

Mar 22 2017 12:07
Matthew le Cordeur

Cape Town – National Empowerment Fund (NEF) CEO Philisiwe Mthethwa said the fund is considering an offer of R12.2bn for Mercantile Bank, which has recently announced it would be selling its South African bank.

“This is low hanging fruit that could be scaled up. It addresses the need of (establishing) black entrepreneurs,” Mthethwa said.

The NEF CEO was one of the stakeholders making submissions to Parliament during a second round of public hearings on transformation in the financial services sector.

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). 

He said the rationale for the acquisition would be that Mercantile has existing infrastructure, IT and systems, a banking licence, an existing brand and existing assets.

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.

READ: Bank sale opens door for black owners

“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.”

Mercantile Bank is being sold by its parent company in Portugal, Caixa Geral de Depósitos.

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). 



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