November 23, 2018 / 7:03 AM / 2 years ago

South Africa's Capitec Bank wins race to buy Mercantile in $230 mln deal

A man is reflected in the window of a branch of South Africa's Capitec Bank in Cape Town in this picture taken March 15, 2016. REUTERS/Mike Hutchings

JOHANNESBURG (Reuters) - South Africa’s Capitec Bank said on Thursday its 3.2 billion rand ($232 million) offer to buy Mercantile Bank had been accepted, paving the way for the Stellenbosch-based lender to expand into business banking.

Capitec had been among bidders for Mercantile Bank, a unit of the Portuguese state-owned banking group, Caixa Geral de Depósitos, S.A. (CGD).

CGD is divesting from non-core operations outside of Portugal as part of its recapitalisation plan.

“Mercantile’s core business offer is business banking for small- to medium-sized enterprises and entrepreneurs and it is therefore well positioned to align with Capitec Bank’s business banking strategy,” Capitec said in a statement.

The acquisition, which is subject to regulatory approval, will be paid from capital and cash reserves, it added.

($1 = 13.7700 rand)

Reporting by Nqobile Dludla; Editing by Joe Brock

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