Following lengthy acquisition process, South Africa’s Mercantile Bank now a division of Capitec
Mercantile Bank, where many FX brokers in South Africa hold their business accounts, has completed its acquisition by Capitec
For brokerages operating in South Africa, many use Mercantile Bank for client custodian accounts and for their operating capital.
Today,the bank has finalized its acquisition by compatriot financial giant Capitec.
Following a lengthy sale and regulatory approvals process, Capitec Bank Limited acquired Mercantile Bank Limited late last year. It was Capitec’s objective to build on the Mercantile foundation to offer the best business banking solution for small and medium-sized enterprises in South Africa, while staying true to the same fundamentals that made Capitec the bank of choice for more than 14 million South Africans.
Pursuant to the sale process and in terms of section 54 of the Banks Act, 94 of 1990, Mercantile Bank received consent from the Prudential Authority and the Minister of Finance to transfer the Mercantile business to Capitec.
The effective date of transfer will be 1 December 2020 and, on this date, all Mercantile’s assets and liabilities will transfer to and vest in Capitec. Accordingly, all agreements, appointments, transactions, and documents entered into, made, drawn up, or executed with, by or in favour of Mercantile and in force immediately prior to the transfer, shall remain in full force and effect and shall be construed for all purposes as if they had been entered into, made, drawn up or executed with, by or in favour of Capitec.
The only major exception shall be Mercantile’s financial services provider (FSP) license, which cannot be transferred and will lapse. Capitec’s existing FSP license will be amended to include Mercantile’s current financial product and service offering.
With this in mind, corporate clients should note that, effective from 1 December 2020, Mercantile will become a division of Capitec Bank Limited and will use Capitec’s FSP license and registration as detailed below:
Mercantile Bank a division of Capitec Bank Limited Reg. No: 1980/003695/06. An authorised financial services provider (FSP46669) and registered credit provider (NCRCP13).
These changes are fairly significant but they should have no impact on you or on the way you interact with Mercantile. In this regard:
• Any current relationship with Mercantile Bank will not be affected. Your accounts (including current, savings, investment, trading and loan accounts) will remain unchanged except that Capitec will become the counterparty to any existing agreement, without you having to complete or sign any paperwork.
• Bank investments will remain secure and Capitec will assume liability for them on the back of a much stronger balance sheet.
• Any loan or loans payable by customers to Mercantile will become payable to Capitec and any security that they have given in respect of such loan or loans will transfer to Capitec.
• There will be no adverse impact on banking and other fees payable by customers.
• Customers will have the benefit of access to a broader contact network under a very strong brand and the current Mercantile business centre network will be expanded.
• There will be no major system changes in the short-term, although there will be some in the longer-term as we work to find ways to help entrepreneurs live and bank better.
• Clients will continue to use the service and product offering to which they are accustomed and the bank confirms that it will continue on its journey to build the best business bank for all current and future clients.