By Mark Ford

A specialist South Africa-based bank will soon be able to issue its own letters of credit (L/Cs) if its acquisition of a bank based in Mauritius is finalised.

Sasfin Holdings, announced it would acquire SBM Nedbank International subject to approvals from South Africa's Nedcor Group for its net-asset value, plus a 5 per cent premium, making a total of around US$24-million.

Merger

Mauritius-registered SBI has operated as a joint Nedbank and State Bank of Mauritius venture since 2000.

Sasfin, a Johannesburg Stock Exchange-listed specialist banking and financial services group with a niche in the entrepreneurial corporate, commercial and private client markets, has ambitions to break into new and wider markets.

Business fit

Sasfin says the acquisition fits "exceptionally well" with its business finance unit and will enable the niche banker to issue its own L/Cs.

It will also allow the Sasfin group to fund its receivables with low-cost deposits rather than more costly inter-bank financing and enter into direct spot and forward-exchange contracts.

SBM Nedbank International will change its name to Sasfin Bank International (SBI) once the merger is complete.

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