SA Bank of Athens Repositioning as Grobank

Against the background of South Africa’s rapidly evolving and expanding banking landscape, where digital solutions and low-cost operating models have become some of the top challenges, the former South African Bank of Athens has repositioned itself as a new banking entity – Grobank.

The Grobank brand reflects the transaction that concluded in October 2018 when GroCapital Holdings, supported by its shareholders AFGRI Group Holdings, Fairfax Africa and the Public Investment Corporation, obtained all the regulatory approvals for the acquisition of the South African Bank of Athens Limited (SABA), corresponding to 99.81% of the issued share capital. The SA Bank of Athens has been operating in South Africa since 1947 – a history of more than seven decades and, with the acquisition, the opportunity has been created to reposition the bank and introduce its new identity: Grobank.

Grobank is positioning itself to deliver both the extensive banking experience gained through its history as Bank of Athens, as well as accessing the deep food and agri-business knowledge of its shareholders. This will result in a Bank that is focused firmly on supporting the food and agriculture value chain in South Africa, comprising business ranging from farms to food manufacturers, retailers, transporters, importers / exporters and more. The Bank will be focused on building an agri-banking offering based directly on the insights gained through direct relationships with farmers and agri-businesses held across generations, and will add these to its existing range of proven business banking products and services. These services offered will also allow the Bank to continue to serve and grow its current SME customer base, as well as focusing on expanding its alliance banking business offering.

Grobank CEO, Mr Spiro Georgopoulos, said:

“We are marrying our strengths as bankers and financiers to the strategically important need to support food security. This focus will not only lie in the farming sector, but also across the food business chain including small and medium enterprises, business investors, entrepreneurs, retailers, restaurant owners, warehouse owners and factory owners.”

In a time where banking services are becoming increasingly digital, Grobank also intends on placing relationship banking at the heart of its offering. While a great digital offering remains a critical element of banking services, Grobank believes that a true relationship with an expert banker remains a core need for businesses that make complex banking decisions. Understanding what matters to a business, and delivering on those needs cannot be delivered without engaging directly with that business. As a result, while the Bank has today made a complete brand transition at all of its branches and digital sites, customer engagement will still largely be delivered at the farm, factory or premises of its customers.

Mr Georgopoulos, said “We will continue our strategy to reach out to business owners, learn their business, listen to their needs and provide products and services tailor-made for our market. We are committed to develop a deep understanding of the Grobank client’s world, their financial needs and aspirations.”

For information about Grobank, visit www.grobank.co.za.

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AFGRI Group Holdings and an investor consortium create a strategic commodity/grain storage platform to support growth and strengthen food security

AFGRI Group Holdings (“AGH”), the investment holding company with interests in food, agriculture and financial services related companies providing products and services to ensure sustainable agriculture and food security (collectively, the “AFGRI Group”), today announced the creation of a strategic grain storage platform vehicle in collaboration with a consortium of leading South African institutional investors to enable the growth of grain storage capacity in South Africa and on the continent and to strengthen food security in the region.

As background to the transaction, Chris Venter, the CEO of AGH, explains that in 2011 the AFGRI Group sold its debtors’ book to the Land and Agricultural Bank of South Africa (“Land Bank”) with a clear vision of gaining access to a stronger balance sheet and the ability to expand its lending capabilities to offer a broader base of financial support to farmers.

“Since then the AFGRI Group has substantially increased its debtors’ book, growing it more than fivefold in value from 2011. The number of loans to farmers has also increased considerably from 1,290 to 8,620 farmers. The Group has expanded its financial service offerings across all nine provinces, financing not only grain production but various other commodities. Through the recent acquisition of the South African Bank of Athens, we are today able to offer a wide range of additional banking products to farmers.”

Venter said that using a similar approach, the AFGRI Group is now pleased to announce the creation of a strategic storage platform vehicle, AFGRI Grain Silo Company Proprietary Limited (“AFGRI Grain Silo Company”) – which has the clear objective of expanding its current storage capacity of some 4,7 million tons to six million tons in the near future. “This will allow us to not only cater for grain storage, but to expand into the storage of other types of commodities,” says Venter.

Three new institutional investors have committed to invest alongside the Group and its current BEE employee partner, Izitsalo Employee Investments, in the platform and through this, to support AFGRI’s strategy for growth and food security. The three institutional investment partners are STANLIB Infrastructure Investments, Wiphold, and the Land Bank. This investment consortium will initially own storage facilities with a total value of R3,6 billion at inception.

Venter continued, “AFGRI Operations Proprietary Limited (“AFGRI Operations”) will manage the storage facilities on behalf of AFGRI Grain Silo Company in terms of an evergreen management agreement. This arrangement provides the strategic benefit of AFGRI’s excellent track record in managing storage operations, and deep experience of the sector.”

AFGRI Operations will continue to be a JSE Approved Storage Operator for all the grain silos, while the grain silos will continue to be JSE Approved Silos and JSE registered delivery points.

This transaction will assist AFGRI to achieve four strategic objectives, namely:

  1. the creation of a strategic storage platform with a focus on expanding across Africa;
  2. partnering with reputable South African institutional investors;
  3. unlocking the value of AFGRI’s grain storage assets, the proceeds from which will be used to further expand AFGRI’s financial services reach and support for farmers; and
  4. entrenching AFGRI’s reputation as the foremost long-term services provider to farmers and the agricultural industry. The Group’s current 4,7 million tonne storage footprint consists of grain silos and bunker complexes throughout six provinces in South Africa.

“High-quality commodity storage and related services is in demand by our customers, and through the consortium, we aim to ensure that we enter new areas across South Africa and simultaneously grow capacity,” said Jacob de Villiers, MD of AFGRI Grain Management.

“For clients making use of our silo and bunker facilities, it is business as usual,” de Villiers indicated. Farmers and grain silo users will continue to experience AFGRI Grain Management’s proven expertise and track record on an ongoing and uninterrupted basis.”

The effective date of the transaction is 31 March 2019 and all suspensive conditions to the transaction have been fulfilled.

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