OVERVIEW Banking and
OVERVIEW Banking and financial services African Bank has bought Ubank. Merensky Timber, the third-largest private plantation owner in Africa, has attracted significant investment. Ubank, a bank with a strong presence in Limpopo because of its ties with the mining industry, was placed under curatorship in 2022 but continued to trade. Its assets and liabilities have now been acquired by African Bank. Together with the purchase of Grindrod Bank in 2023, the Ubank transaction forms part of African Bank’s Excelerate25 programme, which aims to scale up to the point where it can list on the stock exchange. These developments represent a significant turnaround for African Bank itself. Its predecessor went into curatorship in 2014 with the Reserve Bank, Government Employees Pension Fund and other banks taking ownership. Since then, a “good” bank was hived off and it is this entity which will make available to the public the 50% share that the Reserve Bank owns. The listing should take place in 2025. The Industrial Development Corporation, South Africa’s most significant development finance institution, plays a big role in financing agriculture, mining and tourism in Limpopo. At national level, it has invested over R37- billion into mining and metals and the IDC has a strategic stake in Hans Merensky Holdings (HMH), which includes agricultural giant Westfalia Fruit among its assets. Until 2023, Merensky Timbers was also a wholly-owned subsidiary of HMH but a large transaction, in which Criterion Africa Partners (CAP) and FMO, a Dutch entrepreneurial development bank, took a stake in Merensky Timber, will allow the company to unbundle from HMH. The IDC’s stake will now be held directly in Merensky Timber. Each of the new equity partners is thought to have invested about -million each (Africa Private Equity News). The Small Business Finance and Regions office of the IDC (SBF ONLINE RESOURCES Financial Sector Conduct Authority: www.fsca.co.za Public Investment Corporation: www.pic.gov.za South African Institute for Chartered Accountants: www.saica.co.za SECTOR INSIGHT Merensky Timber is unbundling from its holding company. Limpopo) is limited to projects valued up to R20-million so the focus is on SMMEs but it works with head office in support of bigger projects. One of these is a new hotel being developed in Musina. The two most active agricultural companies in Limpopo are registered financial service providers. VKB Landbou lends to farmers to enable them to produce or to expand production. Afgri has a Financial Solutions division and Afgri Insurance Brokers. Financing for solar power projects is among the newer products. The first news of a scandal at VBS Mutual Bank, one of three mutual banks in South Africa and an entity that began life as the Venda Building Society, came in 2018. A full-blown story of corruption followed, the first result of which came in court in 2024, with a 495-year sentence for fraud, theft, money-laundering and racketeering passed on the former chairperson. His guilty plea, with accompanying explanations, saw the effective sentence reduced to 15 years. ■ LIMPOPO BUSINESS 2024/25 48 PHOTO: Merensky Timber
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