JSE-listed services, trading and distribution company Bidvest Group has advised shareholders that its board has approved a process to dispose of Bidvest Bank and its related entity FinGlobal.
The Bidvest financial services division provides banking and related products and services to South African corporates, businesses and consumers through Bidvest Bank and FinGlobal. It also provides short- and long-term insurance products through Bidvest Insurance, Bidvest Life and Compendium.
The financial services division’s post-pandemic financial performance has been strong, evident in Bidvest's 2023 financial year and its 2024 interim results. This positive momentum is continuing in subsequent trading, the group said in market update statement.
“Considering the overall group strategy, and notwithstanding the solid performance of the financial services division, the Bidvest Group board believes dedicated financial services ownership is required for the continued sustainability and prosperity of some of the companies in this division.
“The formal disposal process for Bidvest Bank and FinGlobal will be launched imminently, and management will endeavour to identify a suitable acquirer/s by end of the 2024 calendar year. The transaction/s will be subject to several relevant regulatory approvals.”
Apart from Bidvest Bank and FinGlobal, the remaining short-term insurance businesses within the financial services division focus primarily on vehicle insurance cover and related value-added products.
These businesses will be transferred to the Bidvest automotive division, and this aligns with the division’s strategy of diversifying into allied automotive services.
“The opportunity to facilitate a step-change in value-creation for all stakeholders does not arise often. The strategic restructure of Bidvest Financial Services allows us to set these businesses up for their next phase of sustainable expansion while recycling capital to position the group for continued growth,” said Bidvest Group CE Mpumi Madisa.
The Bidvest Group’s strategic ambition is to achieve scale and growth by maintaining a strong balance sheet, exercising financial discipline through considered capital allocation and pursuing organic and acquisitive growth opportunities in the group’s identified areas of focus.
The group aims to expand its blend of defensive, cyclical and growth assets through capital investment in key strategic areas to ensure continued growth in South Africa and internationally, in niche services of hygiene, facilities management and distribution of plumbing and related products.
Further, the disposal of Bidvest Life, which has been previously announced, is under way.
Post this disposal process, the group will comprise of six divisions, namely Services International, Freight, Services South Africa, Commercial Products, Branded Products and Automotive, with Adcock Ingram remaining a majority-owned Bidvest subsidiary company.
This strategic restructure facilitates the recycling of capital to support continued growth.
Bidvest Group will ensure Bidvest Bank remains financially sound and operationally stable during this transition period. The wellbeing of employees and maintaining high-quality service standards for all clients will remain priorities, the group added.
In its 2023 financial year, Bidvest Bank generated trading profit of R234-millionand operating income of R219-million.
The Bidvest Bank book, which consists mainly of leased assets, loans and advances, totalled R5-billion, funded by deposits of R8-billion. Cash and investment securities amounted to R6-billion, which included restricted cash, from a Bidvest Group perspective, of R4-billion.