Rental mar­ket of­fer­ing taken to a new level

Finweek English Edition - - FUND FOCUS -

Sas­fin Bank’s re­cent ac­qui­si­tion of Fin­tech prom­ises to be a ma­jor boost for Sas­fin in the rental mar­ket in the pe­riod ahead. The R156m deal has re­ceived Reser ve Bank a nd Com­pe­ti­tion Com­mis­sion ap­proval.

Sasf in pro­vides rental, lease and in­stal­ment sale agree­ment ser­vices, par­tic­u­larly in the f inanc­ing of of­fice au­to­ma­tion, and re­lated equip­ment such as copiers, se­cu­rity, in­for­ma­tion and com­mu­ni­ca­tion tech­nol­ogy as well as cap­i­tal equip­ment. This is gen­er­ally re­ferred to as the ‘rental mar­ket’. Fin­tech op­er­ates in the same mar­ket with more than 10 000 com­mer­cial and cor­po­rate cus­tomers.

Sasf i n’s Busi­ness Bank­ing di­vi­sion of­fers equip­ment f inance as well as trade and debtor f inance and is one of Sas­fin’s most suc­cess­ful di­vi­sions.

Says Linda Fröh­lich, head of t he group’s Busi ne s s Bank i ng di­vi­sion: “The main driver is that Fin­tech will pro­vide us with an op­por­tu­nity to strengthen our po­si­tion in the mar­ket and de­ploy our cap­i­tal more ef­fec­tively.

“We an­tic­i­pate good, solid, con­sis­tent growth dur­ing the next three to f ive years in spite of the cur­rent tr ying con­di­tions ex­pe­ri­enced in the South African econ­omy.”

Three or f our y e a r s a go, s he e x pl a i ns, i t had a l r eady be­come ap­par­ent that Sasf in needed a game changer, and in spite of scour­ing the mar­ket for op­por­tu­ni­ties, it failed to f ind a suit­able part­ner.

Then t he Fin­tech op­por­tu­nit y pre­sented it­self. The com­pany op­er­ates in the same fields, has sim­i­lar busi­ness mod­els, boasts ex­cel­lent man­age­ment a nd com­pa­ra­ble c u l t ures a nd is com­fort­ably geared to the oner­ous reg­u­la­tory re­quire­ments of the se­cu­ri­tised space.

The Sas­fin se­cu­ri­ti­sa­tion ve­hi­cle, the old­est in South Africa, was launched in 1991 and has grown from strength to strength since then. Ten years ago Sas­fin’s book stood at R300m and to­day is R3.4bn, with Fin­tech tak­ing it to over R4bn. Other big at­trac­tions that the deal has brought to Sasf in, s ay s Fröhl i c h, is that Fin­tech is “lean and mean” and has t wo ma­jor clients, By t e s a nd Ri­coh S A, e nt r e n c h e d on i t s pl a t f or m. Con­se­quently, it s oper­a­tions are spread across the coun­try.

Sas­fin and Fin­tech will look to boost ef f ic i encies through the deal and will be­gin to op­er­ate un­der one brand in the near fu­ture. Glen Christop­ulo, Fin­tech CEO and a for­mer share­holder, will con­tinue his em­ploy­ment with the group.

“Their ser­vice lev­els are good, so are ours; their credit is very sim­i­lar to ours; and there isn’t a huge over­lap in our busi­nesses. They have sim­i­lar prod­ucts, sim­i­lar of­fer­ings, but we play in dif­fer­ent are­nas,” he ex­plains.

Fröh­lich says that Fin­tech’s ma­jor ra­tio­nale for the ac­qui­si­tion was that it needed a part­ner to help grow its busi­ness. “And that’s what we do. We part­ner with you, get to un­der­stand your

Head of Busi­ness Bank­ing at Sas­fin busi­ness, and help you grow to cre­ate wealth. A time, in fact, comes when smaller busi­nesses need a big­ger brother. And apart from all the other syn­er­gies, our rep­u­ta­tion and bal­ance sheet will al­low Fin­tech con­sid­er­ably more op­er­a­tiona l and mar­ket l at it ude. Pre­vi­ously they could do deals of, say, a max­i­mum R8m – now they have the plat­form to en­gage in much big­ger deals.”

Fröh­lich says that i ron­i­cally her di­vi­sion’s last ma­jor growth phase was when f inan­cial mar­kets col­lapsed in 2008. “Most banks saw fit to tighten up, and we be­lieved that we were well placed to move into that space with our more con­ser­va­tive credit and slightly higher rates. Though the mar­gins be­tween us and them were small, we com­pen­sated with our very strong ser­vice ethic.

“Peo­ple are peo­ple and they need a bit more love when things are dif­fi­cult, and we played strongly to that. Your bank is your bank, but if it stands by you and helps you when you most need it, it takes the re­la­tion­ship to another level,” she says.




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