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Capitec Bank, a leading South African retail bank co-founded by billionaire Michiel Le Roux, has announced the acquisition of a majority stake in Cyprus-based digital non-bank consumer lender, Avafin Holding for R500 million ($26.76 million).
The deal, pending regulatory approvals from the Financial Surveillance Department of the SA Reserve Bank and the Polish competition authority, marks a significant step for Capitec Bank in its internationalization strategy.
Capitec Bank takes control of Avafin Holding, eyes international growth
Avafin Holding, formerly Cream Finance, is an international online consumer loan company offering products in various countries, including Poland, Latvia, Georgia, the Czech Republic, Mexico, and Denmark. With Capitec Bank’s acquisition, their ownership in Avafin will increase from 40.66 percent to 97.69 percent, making Avafin a subsidiary of the South African bank.
Capitec Bank CEO Gerrie Fourie sees this move as a strategic opportunity to diversify income sources and expand their presence in foreign markets. Fourie stated, “Acquiring a controlling stake in Avafin is a strategic opportunity to diversify our income sources and build on our experience in foreign markets.
“We aim to leverage synergies between the two companies and continue to grow our footprint in the online consumer lending space. We believe this acquisition positions Capitec well for future growth,” Gerrie Fourie added.
Michiel Le Roux’s $1.2-billion fortune tied to Capitec’s recent success
Capitec Bank, founded two decades ago by Michiel Le Roux, Jannie Mouton, and Riaan Stassen, has evolved into a globally renowned banking brand. The bank, a major player in South Africa, provides transactional banking services and diverse loan products, such as term loans, credit facilities, and credit cards.
Now, with a market capitalization of R245 billion ($13.13 billion), Capitec’s strategic acquisition of Avafin marks a bold step towards expanding into the European market. Le Roux, one of Africa’s wealthiest individuals, primarily derives his $1.2 billion fortune from his 11.39-percent stake in Capitec Bank.
In the upcoming months, Capitec faces critical regulatory challenges and the task of seamlessly integrating Avafin’s operations. Investors and analysts will closely monitor this venture, as its success could redefine Capitec’s growth trajectory and solidify its standing as a leading innovator in the global digital banking landscape.
