Capitec is selling its rental finance unit.
Image: Supplied
Capitec is selling its rental finance subsidiary to Sasfin Capital for R201 million in cash, saying the business no longer aligns with the bank's core strategic focus.
The bank announced that Sasfin Capital, a wholly owned subsidiary of Sasfin Holdings, will acquire 100% of the issued share capital of Capitec Rental Finance (CRF), which provides asset financing solutions to businesses across a range of industries.
Capitec acquired CRF in 2019 as part of its R3.56 billion acquisition of Mercantile Bank, a deal that expanded the retail banking group's offering into business banking and financing for small and medium-sized enterprises.
"The board believes CRF would benefit from integration with a specialist operator," Capitec said. It said Sasfin, through its interest in Sunlyn, has decades of experience in rental finance and is better positioned to maximise the value of the business.
The transaction is valued at R201 million, subject to customary closing adjustments and regulatory approvals. Although Capitec is selling CRF, it will continue funding the business by providing a secured R1.6 billion credit facility after the deal closes.
The funding will support CRF's rental receivables book – the portfolio of existing rental finance agreements from which the business collects ongoing monthly repayments from customers financing equipment and other business assets.
The disposal marks a further step in Capitec's focus on its core banking business. Founded in 2001, the bank has grown into one of South Africa's largest retail banks, serving more than 24 million clients through a network of more than 800 branches.
For Sasfin, the acquisition strengthens its asset and rental finance operations. The group has shifted away from traditional banking in recent years to focus on specialist financial services, with rental finance conducted through its Sunlyn business alongside its wealth management operations.
The transaction remains subject to the fulfilment of customary suspensive conditions and the necessary regulatory approvals.
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