TymeBank has finalised the acquisition of Retail Capital, solidifying its plans to take on incumbent banks on business banking.
The Patrice Motsepe-linked bank announced in August that it wanted to take over small-business lender, Retail Capital, to get access to its more than 43 000 credit customers.
Now Retail Capital has officially started the work to become TymeBank's new division after the two obtained all the necessary regulatory approvals.
The bank said it should complete the integration of the two companies before the end of December, which will see Retail Capital's CEO, Karl Westvig, becoming a Tyme Group executive responsible for business banking and business lending. But the bank won't rebrand Retail Capital yet. The two will continue to operate as two separate brands. TymeBank paid R1.5 billion for the deal.
This is TymeBank's first acquisition since it entered the retail banking space in SA, disrupting the industry with its no monthly-fee offering, which set the tone for most incumbents else to create new zero-fee products that would compete with it.
"[It's] the beginning of a new era for TymeBank as we branch out into working capital funding for small businesses," said TymeBank CEO Coen Jonker.
"TymeBank Business Banking is strengthened by a quality acquisition and a high-calibre team and we look forward to making business banking and access to capital more affordable for South Africa's small business owners and entrepreneurs," he added.
The TymeBank's Business Banking division that Westvig will lead already has more than 120 000 customers with transactional business accounts, providing a solid base for Retail Capital to grow its credit customers.
The lender has already provided credit to more than 50 000 business owners in the past decade, with over R7 billion in working capital disbursed. TymeBank is likely also hoping to convert many of Retail Capital's credit customers to its transactional banking clients. It said it is on track to reach 6 million customers this month.