APA

African Press Association

Portugal approves sale of Mercantile Bank in SA

Flag of Portugal

JOHANNESBURG – THE Portuguese government has approved the sale of Mercantile Bank Limited by Caixa Geral de Depósitos (CGD), a state-owned banking and financial services group.

Mercantile is 100-percent owned by CGD, which announced in March 2017 that it intends to sell the South African bank as part of a restructuring plan required and approved by the European Commission.

On Friday, the Portugal, via its Council of Ministers, signed the decree-law required to begin the official process of privatising or selling an asset owned by CGD.

President Marcelo Rebelo de Sousa now has to promulgate this decree within a period of 30 days, after which the formal process of selling Mercantile Bank will officially begin.

As part of this formal process, the interest parties will be brought into contact with CGD’s financial advisers which have already been appointed to facilitate the sale, namely the Deutsche Bank South Africa and Caixa Banco de Investimento Portugal.

Karl Kumbier, Chief Executive Officer of Mercantile, said the bank was not reliant on any additional capital funding from CGD and the sales process should not affect Mercantile’s operations.

He said they would continue to focus on the strategy to become the number one business bank in South Africa.

“Mercantile is confident that we will find the right partner who will not only give us the opportunity to expand our own business further, but also to continue to grow the businesses of South African entrepreneurs,” Kumbier.

As the largest of South Africa’s small banks by assets, Mercantile has seen its assets grow from over R6 billion (US$471 million) in 2011, to over R13 billion currently.

It also holds R9 billion in deposits, compared to deposits of R4,2 billion in 2011.

– CAJ News