End of the road for Bankfin as Absa looks to reduce expenses
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ABSA's vehicle and asset financing division Bankfin will be integrated into Absa itself, the bank announced yesterday.
The integration will result in the disappearance of the Bankfin brand and could save the banking group R20m a year.
"The aim is to position Absa across all market segments," said the CE of Absa's vehicle and asset finance division, Peter Mageza.
He said the aim of the integration of Bankfin into Absa was to take advantage of the benefits that would arise.
"In the past, Bankfin operated almost as a stand-alone unit," Mageza said.
This is despite Bankfin having a 25% market share with a 50% presence in the used car market.
Mageza insisted that both Bankfin and Absa clients whose views had been canvassed favoured the change.
Instead of Bankfin having a presence in 68 of its own branches, vehicle finance could be channelled more effectively through Absa's 600 branches.
"You don't need separate units, and this will bring cost savings and faster turnaround times," Mageza said.
He said no job cuts were expected, although some staff numbers would be cut through natural attrition.
Mageza said that one benefit from the restructuring would be a greater ability to innovate.
He stressed the need to make vehicles more affordable, especially for first-time buyers, with a massive potential market of younger blacks.
He also gave his support to plans for a summit meeting between the financial sector, automotive manufacturers and retailers and government to address the crisis in vehicle affordability in SA.
"There have already been informal contacts, and the sooner we do this the better," he argued.
"On the issue of affordability, we have a vested interest in seeing the market grow.
"If we look at SA's population profile, we need to address the requirements of younger people.
"We are going to become more creative and innovative."
Mageza suggested that an important area of focus might be to press for an increase in the maximum repayment periods for vehicle finance, and to remove the requirement for motorists who did not have travel allowances to put down a deposit when they financed a vehicle.
The issue of vehicle leasing is also a hot topic in discussions between industry and government.
"There is a need for the industry to push and to lobby for these restraints to be removed," Mageza said.
"Meanwhile, another interest rate cut will be a statement to the industry, that we are so keen to see grow."
Jul 04 2003 06:15:14:000AM John Fraser Business Day 1st Edition
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