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Voluntary announcement: Bidvest Financial Services Division Restructure
THE BIDVEST GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1946/021180/06
Share code: BVT
ISIN ZAE000117321
("Bidvest" or "the Company")
VOLUNTARY ANNOUNCEMENT: BIDVEST FINANCIAL SERVICES DIVISION RESTRUCTURE
"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 whilst recycling
capital to position the Group for continued growth." Mpumi Madisa, chief executive
Background
The Financial Services division provides banking and related products and services to
South African corporates, businesses and consumers through Bidvest Bank and FinGlobal.
The division also offers short- and long-term insurance products through Bidvest
Insurance, Bidvest Life and Compendium. The division's post-pandemic financial
performance has been strong, evident in the FY2023 annual and FY2024 interim results,
and this positive momentum is continuing in subsequent trading.
Strategic focus
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.
Considering the overall Group strategy and notwithstanding the solid performance of the
Financial Services division, the Bidvest Group Board of Directors believes that dedicated
financial services ownership is required for the continued sustainability and prosperity of
some of the companies in this division.
Shareholders are therefore advised that the Bidvest Group Board has approved a process
to dispose of Bidvest Bank and its related entity, 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 Automotive division. This aligns to this division's
strategy of diversifying into allied automotive services.
The disposal of Bidvest Life, which has been previously announced, is underway.
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.
Way forward
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.
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.
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.
For ease of reference, in FY2023, Bidvest Bank generated trading profit and operating
income of R234 million and R219 million, respectively. 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 Group perspective, of R4 billion.
Investor call
Mpumi Madisa, CEO of Bidvest, will host a conference call for investors today, Wednesday
3 July 2024, at 3pm (SA time) to discuss this strategic decision.
Please register for the conference call using the link below. An email confirmation will
follow, together with dial-in options.
https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNum
ber=5288270&linkSecurityString=11fb42ada8
Johannesburg
Date: 3 July 2024
Sponsor: Investec Bank Limited
Date: 03-07-2024 11:09:00
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