Finbond Group to exit South Africa and increase focus on North America and Europe
Finbond said that lockdown and a weak economy have limited new business growth potential in SA.
Leading North-American and South African financial services institution Finbond Group has announced that, as part of its short- and medium-term strategic objectives, it plans on selling its South African operations to focus on North America and Europe.
It will also delist from the Johannesburg Stock Exchange (JSE) to relist on a North American stock exchange.
Finbond has 340 branches in South Africa, of which 166 are located in Gauteng, North West, Limpopo and Mpumalanga, 66 in Kwa-Zulu Natal, 75 in the Western Cape, 60 in the Eastern Cape and 63 in the Free State and Northern Cape.
According to a statement, Finbond said the South African economy faced a difficult year and a much slower recovery process than predicted following the election of President Cyril Ramaphosa. Coupled with higher unemployment and low growth in household disposable income, South African market conditions severely limited new business growth potential.
Looking ahead, the group said that the challenging and difficult macro-economic environment, and the adverse market conditions are not expected to abate. “In the short term, market conditions are expected to significantly deteriorate further. It is expected that the government ordered lockdowns will have a significantly adverse short-term impact on Finbond’s results for the year ending 28 February 2021,” the statement read.
The company reported that, for the month of April 2020, business volumes in South Africa were down approximately 70 percent and in North America business volumes were down approximately 50 percent. It said that, should lockdown last much longer, the effects on Finbond will be much worse.