France’s largest bank BNP Paribas to buy South African credit provider

France's largest bank, BNP Paribas, has started talks to buy RCS Investment Holdings, a South African provider of consumer credit, from Standard Bank Group and Foschini Group for R2.65-billion ($254-million).

BNP Paribas Personal Finance will complete the cash transaction by September, Johannesburg-based Standard Bank said in a statement on Thursday. RCS had a net asset value of R1.7-billion at the end of September, the statement said.

RCS is a joint venture between Foschini, a clothing retailer that owns 55%, and Standard Bank, Africa's largest lender. Credit demand from South Africa's growing black middle class has helped boost retailers' earnings. BNP, France's biggest bank, first expanded in South Africa when it bought a controlling stake in Cadiz Holdings's securities unit in 2011.

Foschini, which may make about R1.4-billion, will use the proceeds of the sale to repurchase its own shares, the Cape Town-based retailer said in a separate statement on Thursday. The company has wanted to reduce its shareholding in RCS to less than 50% since last year because a large portion of its debt is linked to RCS, it said.

Standard Bank plans to use the additional capital released from the sale to invest in its African operations, the lender said in an emailed statement. "The proceeds will provide Standard Bank with leverage for growth opportunities and will help improve the group's return on equity," it said. – Bloomberg


Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

Advertising
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday