Absa Group plans to establish its first office in China by the end of this year, aiming to connect Chinese companies doing business in Africa with the bank. The move reflects the bank’s commitment to China and its belief in the country’s future growth. China is Africa’s largest trading partner, and Absa Group sees strong revenue growth potential in the China Corridor. In addition to the new office, the bank has signed an agreement with China Development Bank for a working capital facility, further solidifying its relationship with Chinese partners.
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Capitec: Higher profits despite increased impairments
Capitec CEO Gerrie Fourie has warned customers to “live within their means” as the South African lender has reported an 80% increase in credit impairments to ZAR6.3bn ($404m) amid a tough economic climate. Net loans and advances grew by 17% to ZAR78.2bn. Fourie attributed the credit losses to the deteriorating economy and inflation. Meanwhile, Capitec has cut its credit limit for customers by ZAR3.5bn, and only approves 45% of loan applications, down from its previous low of 60%. The lender has invested ZAR1.4bn in strategic initiatives including the expansion of Capitec Connect and the creation of an insurance business.
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South Africa: Nedbank launches Roblox game
Nedbank has become the first African bank to launch a game on Roblox, aimed at teaching children money management skills. Developed by Sea Monster Entertainment, the game Chow Town is a tycoon-style game that allows players to set up and expand a restaurant through incremental investment. The move comes as the gaming market in Africa is expected to grow at a compound annual rate of 12.65% between 2023 and 2028. Nedbank’s Chow Town aims to teach entrepreneurial skills and offer an educational experience for tweens.
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South Africa: Fin aquires Thuthukani Housing Finance
African neobank Fin has acquired Thuthukani Housing Finance, renaming the firm’s incremental housing finance product as Fin Home Loans and integrating it into its South African portfolio. Fin’s co-CEO said the acquisition was part of its efforts to identify partners in different areas with this requirement, while the acquisition will help scale the business and bring its offering to more people.
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South Africa: Banks sign onto low-fee transaction platform
BankservAfrica has launched PayShap, a new rapid low-fee payment system that allows consumers to send small-sum transactions with just a phone number. The system is expected to bring more people towards a cashless society and has been positively received by commercial banks. Currently, the system is available in Standard Bank, Absa, Nedbank and FNB. However, more banks, including Capitec, Investec, Discovery, TymeBank and Standard Chartered, are expected to integrate the new system in the future.
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South Africa: Standard Bank CEO voices cautious optimism about CBDCs
The CEO of Standard Bank, Sim Tshabalala, has expressed cautious support for central bank digital currencies (CBDCs) at the Standard Bank African Central Bank Conference. Tshabalala called CBDCs “potentially useful” for interbank clearing and serving a social purpose in increasing participation in the formal financial system while reducing tax evasion and financial crime. However, he expressed skepticism about privately-generated crypto assets, saying they make it easier to hide or launder money and posed risks to banks. South African Reserve Bank (SARB) has embarked on a study investigating the feasibility of CBDC.
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South Africa: Nedbank chief criticizes government inaction
Nedbank CEO Mike Brown has criticised the South African government’s lack of action in dealing with various crises, including electricity supply and distribution, transport and logistics, and water infrastructure. Brown said that the economy had deteriorated in the final quarter of 2022 due to these issues and that urgent and decisive leadership was needed. The bank predicted that the impact of load shedding would continue to have negative effects on GDP growth in 2023, with the global economic environment also expected to deteriorate further.
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South Africa: FirstRand CEO slams alliance with Russia
South Africa’s banking industry is at risk from geopolitical issues arising from the government’s close relationship with Russia, according to the CEO of FirstRand, Africa’s largest lender by market value. The country’s stance on Russia could affect its access to international markets and global clearing and settlement, he warned. The government’s indifference to the conflict in Ukraine and friendship with Russia is “foolhardy in the extreme,” he added.
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FATF adds South Africa, Nigeria to grey list
South Africa has been added to the Financial Action Task Force’s (FATF) “grey list” of countries under scrutiny for their standards in preventing money laundering and terrorism financing. This could lead to increased monitoring and enhanced due diligence checks for South African clients at international financial institutions, as well as complications in accessing funding from multilateral development institutions and official lenders. South Africa’s central bank and National Treasury have noted the decision and committed to addressing the concerns raised by the FATF. Nigeria was also added to the grey list on the same day.
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South Africa: Meet Michiel Le Roux, founder of Capitec
Illuminating profile of Le Roux, who co-founded Capitec in 2001 and helped make it into one of Africa’s greatest economic success stories. Capitec targets the emerging middle class in South Africa and is listed on the Johannesburg Stock Exchange (JSE).
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South Africa: Nedbank appoints new chair
Daniel Mminele, the former head of the Presidential Climate Finance Task Team, has been appointed as the new chair designate and independent non-executive director of Nedbank. His appointment as non-executive director will take effect from May and he is set to be elected chair at the bank’s AGM in June, succeeding Mpho Makwana. Nedbank’s announcement said that Mminele’s extensive expertise and experience in banking and financial services, including climate finance, would benefit the bank.
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South Africa: Smile Identity raises $20m Series B
Smile Identity, an African KYC and identity verification platform, has raised $20m in a series B funding round to expand its product and engineering team and AI-powered biometrics. Led by Costanoa and Norrsken22, the round also included participation from Commerce Ventures and Two Culture Capital. Smile Identity intends to expand its presence across Africa and into Francophone and Arab-speaking markets. It also plans to work closely with regulators and ID authorities to build consumer consent standards and enforce African data protection laws.
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South Africa: Development Bank of Southern Africa replaces CEO
The current CEO of DBSA, Mr. Patrick Dlamini, will step down from the board and its committees on March 31, 2023. The DBSA Board has nominated Ms. Boitumelo Mosako as the new CEO, subject to internal appointment processes and procedures. Shareholder approval has been obtained. The effective date of the new CEO appointment will be announced once completed.
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South Africa: Zero Bank claims zero fraud on credit cards
South African digital bank Bank Zero has reported zero successful card fraud incidents since its launch in 2019, despite numerous attempted frauds. The bank attributes its success to its use of advanced technology such as biometric identification and behavioral analytics. Bank Zero’s security system always requires a customer’s authorisation for an online card transaction, whether the website is secure or not, and the bank has a registered patent on its card to prevent skimming. While its customer base is smaller, Bank Zero still claims it is statistically significant.
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South Africa: Rand Merchant Bank opening representative office in NYC
Rand Merchant Bank (RMB) is establishing a presence in the United States to facilitate business flows into Africa. RMB plans to help US companies expand their business into Africa by providing them with access to RMB’s extensive network and expertise in Africa. RMB is a subsidiary of FirstRand Group, one of South Africa’s largest financial services groups. The move is expected to further deepen RMB’s commitment to Africa and provide US companies with a strong partner to help them navigate the African business landscape.
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South Africa: Lulalend to scale up SME lending
Lulalend will use its recent Series B investment to scale the firm’s business to tackle the estimated $20bn SME credit gap in South Africa. Lulalend offers a digital-first approach and a proprietary credit scoring algorithm for faster, simpler, and more transparent access to business funding. To date, it has disbursed billions of rand to SMEs across the country and has a waiting list of 20,000 businesses. The funds raised will be used to increase the size of its loan book, bring new solutions to market, and invest in technology and talent.
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South Africa: Lulalend raises $35m Series B
South African fintech Lulalend has raised $35m in a Series B funding round, led by Lightrock and featuring participation from DEG, Triodos Investment Management, Women’s World Banking Asset Management, IFC, and Quona Capital. The company provides loans and AI-driven cash flow management for small and medium-sized enterprises and is working with Women’s World Banking Asset Management to expand its product to women-owned SMEs. The funding will be used to invest in technology and talent to launch its new digital business banking proposition.
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South Africa: BCG report says traditional banks need to grow digital offering
Retail banking in South Africa is evolving rapidly due to the COVID-19 pandemic, with about 80% of consumers preferring to do their day-to-day banking digitally, according to a report by Boston Consulting Group (BCG) in partnership with Discovery Bank. BCG suggests that traditional banks may struggle to meet new digital expectations and compete with new, more agile challenger banks like Tyme Bank and Bank Zero. However, the report also suggests that traditional banks could leverage their data to understand customer needs and use AI models to predict their needs before they arise.
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South Africa: Insiders sell shares
Insiders of South African bank Capitec Bank Holdings (JSE:CPI) have sold more shares than they have bought in the last year, with CEO Gerhardus Fourie selling R56m worth of shares at a price of R2,131 each. Insiders currently own 20% of the company, worth R42b. The last three months have seen no insider transactions. While a high insider ownership suggests the company is run in the interest of all shareholders, there is a lack of confidence in the insider transactions, and more insider buying is desired.
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South Africa: TymeBank strikes retail partnership, grows footprint
South African digital bank TymeBank has partnered with retail clothing group The Foschini Group (TFG) to offer customers new financial products and services. The partnership will see TymeBank install more than 600 kiosks across TFG stores, allowing customers to open a TymeBank TFG Money account in less than five minutes, with no monthly fees or paperwork. The partnership also includes a ‘Buy Now Pay Later’ solution called MoreTyme and a personal loan program, TymeBank TFG Money Personal Loan. The partnership could expose TymeBank to more than 28 million TFG loyalty program members.
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Zimbabwe: AFC Commercial Bank facilitates remittance transfers
Mama Money, a South African fintech that facilitates cross-border money transfer, has partnered with AFC Commercial Bank to allow customers to send money to any AFC Commercial Bank branch for cash collection at 45 locations across Zimbabwe. The monthly remittance flows from South Africa to Zimbabwe range between $30 to $60 million US dollars, but the cost of sending money can significantly reduce the impact that remittances have. Mama Money facilitates money transfers to over 50 countries across Africa, Asia, and Europe.
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South Africa: interest rates expected to rise
The South African Reserve Bank’s Monetary Policy Committee will meet this week, and it is expected that the interest rate will be increased. According to Finder’s poll of 20 economists, academics and analysts, 93% (19 out of 20) forecast a rate hike on the way. More than half (59%) of the panel think the rate will be increased by 50 basis points (bps), while a third (33%) predict just a 25bps increase. The rate hike comes amid high inflationary conditions in South Africa, with the latest CPI print for December 2022 showing inflation at 7.2%.
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South Africa: Gov’t explores launch of public housing bank
The South African government is looking at launching a housing bank to provide loans to public sector employees, and the “gap market” people who earn too much to get RDP houses and too little to get mortgages from banks. The housing bank plans were revealed by the country’s finance minister Enoch Godongwana, who said that the government is also exploring the possibility of creating a fully-fledged state bank via the South African Post Office, which might merge with African Bank.
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Zimbabwe: FNB, others bid on StanChart Zimbabwe takeover
THE proposed takeover of Standard Chartered Bank Zimbabwe (StanChart), the country’s oldest financial institution, has moved a gear up after five prospective investors including local and regional entities submitted their bids, the Zimbabwe Independent revealed. The London-headquartered bank announced on April 14 last year, that it would leave Angola, Cameroon, Gambia, Sierra Leone and Zimbabwe, as well as Jordan and Lebanon in the Middle East.
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South Africa investigating introduction of ‘digital rand’
The South African Reserve Bank (SARB) is investigating the use of Central Bank Digital Currency (CBDC) and testing a “digital rand” but is trying to narrow down on a specific use case and not in a rush to be a global leader for the format. SARB Governor Lesetja Kganyago said that South Africa would be “very fast followers” regarding the development and implementation of central bank currencies, learning from other countries that are ahead in development.