Financial services group Sanlam and banking group Absa on Monday announced the formation of a joint venture company that will offer home loans to Sanlam clients.
This is the first step in a cooperation agreement singed between the two groups in September last year which will see them jointly developing business plans and structures to harness synergies.
The joint venture is based on Sanlam and Absa’s confidence in the future growth of the mortgage market and that a sustainable new home-loan business could be built using the Sanlam brand, intermediaries and databases, together with Absa’s mortgage and credit expertise and infrastructure, the groups said in a joint statement.
Piet van der Walt, formerly of NBS and Nedcor, has been appointed managing director of the new company.
“As we said at the time of signing the memorandum, working closely with Absa would complement our existing product offering and will provide us with access to a number of key growth areas to continue to unlock shareholder value. The establishment of Sanlam Home Loans is in line with our strategy of improved client focus and follows careful planning to ensure positive financial outcomes for both groups,” said Sanlam group CEO Dr Johan van Zyl.
Absa benefits directly from the agreement by earning income as the mortgage servicer and fees as the lead manager and arranger of the securitisation vehicles. In addition, increased administration volumes give Absa the benefit of economies of scale.
Absa group chief executive Nallie Bosman believes Sanlam Home Loans will pave the way for further joint ventures and cooperation in the banking arena.
“Sanlam Home Loans is the first manifestation of Absa and Sanlam’s shared vision to create profitable business solutions to meet customer needs. It is an example of how Absa and Sanlam will in future leverage their strengths, working together to broaden both their market share, one step at a time,” says Bosman.
The intention is that Sanlam Home Loans will begin operations before the second half of the year. — I-Net Bridge