MMI Holdings, a South African financial services group said it will start providing lending and accepting depot in a sales deal with African Bank.
MMI Holsing said in a statement that “African Bank will be the exclusive provider of consumer credit products to MMI, for solutions falling within its product range”.
African Bank is an unsecured lender in South Africa, the deal with MMI Holdings will further help the struggling lender boosts access to customers of MMI Holdings.
It would be recalled that African Bank was rescued and recapitalised by South Africa’s central bank after its parent African Bank Investments Limited collapsed in 2014.
“African Bank will act as sponsoring bank to facilitate deposit-taking and extend transactional banking capabilities that MMI wishes to offer to its clients”, the bank said in the statement.
The group said it plans to take in about ZAR1 billion in premium as a result of the sales deal. MMI Holsing said it will grow its loan portfolio to USD780 million and also split the profit equally with African Bank.
The deal, however, raises questions of if MMI Holdings might leverage this relationship for a possible merger or acquisition talks with African Bank.
The group is the third largest insurer in South Africa based on its annual premium. Its companies include Momentum, Metropolitan, Guardrisk and Multiply.
