21 June 2001
BoE announced today that it will acquire the business of Cashbank Limited, a
specialised provider of housing finance to the emerging market. Cashbank has
total advances of R359 million and additional assets under management of
R150 million. The company's main products are mortgage loans, and housing
loans which are secured by the clients' pension and provident fund benefits.
Cashbank has its origins in the Group Credit Company, established in 1989,
and it was registered as a mutual bank in 1995 and a commercial bank in
1999.
Tom Boardman, CEO of BoE, said "BoE is delighted to be acquiring the
business of Cashbank, as part of our drive into the emerging market.
Cashbank is a leader in the provision of loans for low cost housing and its
pension and provident fund-secured housing loans offer good growth
potential. Frequently, pension and provident fund savings are the largest
asset of employed individuals in the emerging market and legislation enables
this to be used as security for housing loans. We are confident that we can
realize significant funding and regulatory cost savings by operating
Cashbank's business as part of BoE Bank."
Christine Glover, MD of Cashbank, said "We are excited about the growth
opportunities which will be unlocked as part of the larger BoE Bank and are
confident that our business model will allow for rapid growth of the housing
loan book at acceptable risk levels. BoE's strategy of building a
significant presence in the high growth emerging market fits naturally with
Cashbank's own vision and philosophy." This transaction carries the support
of Cashbank's board of directors.
The Cashbank business will be integrated into BoE Bank's Business Division,
out of which PEP Bank is run. The focus in future will be on growing the
mortgage and pension and provident fund-secured housing loan products.
Cashbank's small personal lending and corporate lending books could be
merged with the corresponding BoE operations.
The acquisition is subject to regulatory approval by the Registrar of Banks,
Competition Commission and Securities Regulation Panel, as well as formal
approval by Cashbank shareholders.
For more information, please contact:
BoE: John Maxwell, 031-364 1020, 083 641 0200
Cashbank: Christine Glover, 021-415 1300
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