GroCapital Holdings Limited acquires Bank of Athens

PRETORIA, 18 September 2018 – GroCapital Holdings Limited (“GroCapital Holdings”) is pleased to announce that it has obtained all regulatory approvals for the acquisition of the South African Bank of Athens Limited (SABA). This follows an announcement made in March 2017 that GroCapital Holdings had acquired the National Bank of Greece Group’s stake in the South African Bank of Athens, corresponding to 99.81% of the issued share capital of the bank. The Minister of Finance and the Registrar of Banks have approved the acquisition and GroCapital Holdings as a bank controlling company. The Competition Tribunal has also approved the acquisition.

GroCapital Holdings shareholders will include AFGRI Group Holdings, Fairfax Africa Holdings Corporation (“Fairfax Africa”) and the Government Employee Pension Fund, represented by the Public Investment Corporation (“PIC”). In AGH, Fairfax Africa and the PIC, [SABA / the Bank] will benefit from a committed and stable shareholder base with proven track records in the financial sector.

“This marks a substantial milestone for the AFGRI Group, providing us the opportunity to expand our financial services product offering, including the acceptance of deposits and cross-border financial settlements and flows, while simultaneously gaining access to SABA’s expertise in alliance, business and international banking,” said Chris Venter, CEO of AGH. He added that the banking licence will deepen the Group’s reach in the financial services, agribusiness and foods sectors in South Africa. “Financial services are a key enabler for these sectors and will help businesses grow and so drive food security,” said Venter.

Venter went on to say that by leveraging services across the combined customer base of both entities, synergies could easily be extracted, and an entire banking bouquet would be on offer. SABA would benefit equally from opportunities to grow forex and commodity trade and finance activities in the agricultural sector.

“The Group brings decades of experience in agriculture and foods, coupled with a deep understanding of agricultural cycles. Our bad debts are negligible, and this is testament to our appreciation of these cycles,” he went on to add.

In Fairfax Africa and the PIC, SABA will benefit from a substantial and stable shareholder base with proven track records in the financial services sector. GroCapital Financial Services (“GroCapital”) focuses on corporates involved in agriculture and food production, offering debt origination, forex and commodity trading, specialised finance and broking services, while UNIGRO focuses an array of financial and insurance products and services to the farmer.

“The PIC is pleased with this transaction. It is a transaction that is in line with our investment mandate given by our client, the GEPF. This transaction fits well with our financial services strategy, which seeks to drive transformation in the agricultural finance sector. SABA’s extensive experience in the financial sector is a perfect vehicle to assist us in realising this strategy. We believe that provision of funding in the agricultural sector is an important component in the agriculture value chain and can greatly contribute to food security,” said Dr Daniel Matjila, CEO of PIC.

GroCapital and UNIGRO will benefit from an expanded product suite including savings, transaction and electronic banking and commercial loans. UNIGRO will be able to assess the feasibility of innovative offerings to service underbanked rural farmers, as an example. This is in addition to including deposits and debit and credit cards. Experience and existing customer relationships will be leveraged to the advantage of growth in SABA’s balance sheet and contribute to profitability by leveraging GroCapital’s experience in commodity, stock and debtor finance, bridging facilities, invoice discounting, trade finance and broking.

SABA was established and has been operational in South Africa since 1947. The bank offers comprehensive traditional business banking such as lending, transactional banking and treasury functions, as well as alliance, business and international banking. It is known for its focus on the development of market-leading, niche alliance transactional banking offerings in partnership with businesses.

“The alliance banking offering is extremely attractive and will benefit our customers in the longer term,” said Venter, going on to elaborate that the alliance banking capabilities provide an extended platform for financial services innovation and partnerships.

“Key for SABA are the growth opportunities that are presented by the transaction, as well as the ability to broaden our offering to our current loyal customers. Furthermore, the transaction contributes towards stabilisation of the banking sector in South Africa and the shareholding is being acquired by investors that support South Africa as an investment destination,” said Spiro Georgopoulos, CEO of SABA.

“We aim to assist in growing the current SABA business. Between the two entities there are sufficient skills, like-mindedness and financial services offerings to achieve this,” added Venter. He went on to say that current SABA customers can be assured that the current high levels of service and products offered by SABA will continue. AGH has given assurances to protect existing depositors and borrowers of SABA.

As lead-arranger of this transaction, AGH will assume operational oversight over the bank with the appointment and secondment of an Integration Officer responsible for the successful implementation of the acquisition.

“The award of the licence highlights the growth potential of the banking sector and offers employment opportunities,” Venter said. “It also presents possible investment opportunities and the potential for future fundraising.”