CompCom approves sale of Capitec’s rental finance unit to Sasfin

The Competition Commission has approved the sale of Capitec Rental Finance (CRF) to Sasfin Capital, an investment holding company.

CRF leased movable business equipment to small and medium businesses so they did not have to pay upfront for costly equipment. 

Capitec acquired the rental unit when it bought Mercantile Bank in 2019 as it diversified into business banking.

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The unit was not seen as strategic or in line with Capitec’s priorities, the bank said in its interim financial statements for the period ended 30 August, released on 30 September. 

“CRF’s rental business does not align with Capitec’s core strategic focus and the Board believes CRF will benefit from integration with a specialist operator.”

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The Sasfin Group, through subsidiaries, also provides asset-backed equipment rental finance to corporate and small and medium enterprise customers. Its financing covers renewable, energy-efficient, technology and other essential business equipment. 

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The CompCom said it was of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market.

To address employment concerns, the parties agreed to a moratorium condition on merger-related retrenchments for a specified period but no details were given.

In Capitec’s interim results reported on the same day as permission by the CompCom was given, it reported that business banking grew by 52%, with Capitec CEO Graham Lee saying the bank only had 5% of South Africa’s business banking market share and 3% of its credit market share – and that there is room for growth in that unit. 

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