Bidvest Group Board of Directors has approved a restructuring plan for its Financial Services division that will involve the disposal of Bidvest Bank and its related entity, FinGlobal.
As much as Bidvest Bank and FinGlobal have shown strong financial performance in recent years as per the division’s FY2023 annual and FY2024 interim results, Bidvest Group Board of Directors believes that dedicated financial services ownership is required for the continued sustainability and prosperity of
the two companies.
In the fiscal year 2023, Bidvest Bank recorded a trading profit of R234 million and an operating income of R219 million. The bank’s balance sheet, primarily composed of leased assets, loans, and advances, showed total assets of R5 billion funded by deposits amounting to R8 billion. Cash and investment securities amounted to R6 billion which included restricted cash, from a Group perspective, of R4 billion.
While making the announcement, Bivest Group CEO, Mpumi Madisa pointed out that the proceeds of the resultant sale will strengthen the remaining divisions while also setting the two financial services entities up for sustainable expansion.
“The opportunity to facilitate a step-change in value-creation for all stakeholders does not arise often. The strategic restructuring of Bidvest Financial Services allows us to set these businesses up for their next phase of sustainable expansion whilst recycling capital to position the Group for continued growth,”
Ms. Mpumi Madisa, CEO of Bidvest Group
In addition, Bidvest Group has announced the transfer of their short-term insurance businesses, currently part of the Financial Services division and mainly concentrating on vehicle insurance cover and related value-added products, to their Automotive division as allied automotive services.
Bidvest also revealed that the official sale process for Bidvest Bank and FinGlobal will commence soon, as the management aims to find a suitable buyer by the end of 2024.
“The envisaged disposal of Bidvest Bank will require several regulatory approvals in terms of (i) the Banks Act, 1990; (ii) the Companies Act, 2008 and the Takeover Regulations promulgated thereunder; (iii) the Competition Act, 1998; and (iv) the Financial Sector Regulation Act, 2017. Bidvest will appropriately engage with the relevant regulators and other bodies in this regard. The Bidvest Group will honour its responsibility to ensure that Bidvest Bank remains financially sound and operationally stable during this transition period. The well-being of employees and maintaining high-quality service standards for all clients will remain priorities.” read the Group’s statement
The disposal of yet another entity in the Financial Services division, Bidvest Life, was announced earlier in the year and is currently underway.
The conclusion of these restructuring will rid Bidvest of its Financial Services division and focus its business on the remaining six divisions, namely; Bidvest Services International, Bidvest Freight, Bidvest Services South Africa, Bidvest Commercial Products, Bidvest Branded Products and Bidvest Automotive, with Adcock Ingram remaining a majority owned Bidvest subsidiary company.
