Aussies may be ready

Sale on the cards: will Patrice Motsepe buy a majority stake in the soon-to-be-launched digital bank?

Billionaire Patrice Motsepe’s African Rainbow Capital (ARC), which failed to secure a spot on the shortlist of buyers for Mercantile Bank, may soon own a bank after all.

This time around the mining magnate has a head start through ARC’S 10% share in what could become the fourth bank in two years to go on sale in SA, namely start-up Tymedigital.

This follows the on-market sale of Barclays Africa (now Absa) shares by its former British parent, Old Mutual’s expected unbundling of Nedbank and an imminent deal involving Portuguese state-owned business bank, Mercantile.

ARC was one of 18 bidders to submit nonbinding offers for Mercantile, but did not make the shortlist of four.

Now Tymedigital could be up for grabs as its 106year-old parent, Commonwealth Bank of Australia (CBA), reviews international operations following an A$700m fine over weak antimoney laundering controls.

ARC, an investment holding company that at March 14 had R2bn for acquisitive deals, would be a natural buyer. It already has a number of stakes in financial services businesses, including Alexander Forbes and challenger stock exchange, A2X Markets.

ARC declined to comment on whether it is in talks with CBA to buy Tymedigital, but CBA has confirmed a review of its SA operations.

“We are in the early stages of a strategic review and we will provide updates on any significant developments,” a spokesperson for the bank tells the FM. “The approach is in line with CBA’S strategy to build a simpler, better bank that is focused on our core banking franchise in Australia and

New Zealand.”

CBA bought Tymedigital, born out of a Deloitte Consulting project called Take Your Money Everywhere (TYME), for about A$40m in January 2015.

The banking start-up, which in September last year clinched the first full banking licence issued by the Reserve Bank since Capitec in 1999, had intended to market its first banking product to the public in the middle of 2018.

A possible exit by its Australian parent could explain the delay. Initially keen to do an interview with the FM, Tymedigital later said that its CEO, the former Nedbank business banking head Sandile Shabalala, would be available for interviews only after CBA publishes financial results on August 8.

Naturally, questions have been raised over whether CBA sees Tymedigital — and an SA business generally — in its simplified future.

“I think new CBA senior management will likely consider selling the SA business,” David Ellis, head of Australian banking research at Morningstar, tells the FM.

“Considering the major restructuring in CBA’S wealth, asset management and life insurance businesses, it is likely that the SA business will be sold sooner rather than later.”