African Bank gears up for IPO with pre-sale and acquisitions

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By Robert Fofana

African Bank gears up for IPO with pre-sale and acquisitions
© Reuters.

JOHANNESBURG – African Bank Holdings Ltd. is setting the stage for an initial public offering (IPO) within the next two years, with a pre-sale slated for March. The bank, which has rebounded from previous bad debt challenges, is currently in a phase of expansion and restructuring.

In preparation for its IPO, African Bank has broadened its footprint through strategic acquisitions, including Grindrod Financial Holdings and UBank Ltd., as well as the financial divisions of Sasfin Holdings Ltd. These moves are part of a broader strategy to diversify the bank’s offerings and revenue streams, especially in the face of a tough economic climate that saw the bank’s profit dip to R505 million due to credit impairment charges. Despite these challenges, African Bank is focusing on growth in net interest income by targeting small and medium-sized enterprises (SMEs) and emphasizing asset-backed retail loans. Additionally, the bank aims to enhance non-interest revenue through its insurance operations and transactional services among its expansive client base of four million.

The South African Reserve Bank (SARB), which acquired a stake in African Bank during its rescue in 2016, is looking to reduce its shareholding as part of this process. Furthermore, an employee share-ownership plan is being established, aligning with the bank’s commitment to both growth and internal stakeholder engagement.

African Bank’s journey toward an IPO represents a significant turnaround from its past financial troubles, demonstrating resilience and a strategic approach to navigating the complexities of the current economic landscape. With these steps, African Bank is not only expanding its business but also reinforcing its position in South Africa’s banking sector ahead of its anticipated public listing.

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