Sanlam has announced that Sanlam Life, Sanlam Personal Loans Proprietary Limited (SPL) and Tyme Bank Limited have entered into agreements which will result in the establishment of a joint venture focused on unsecured personal loans with an embedded credit life offering.
The establishment of the joint venture will be subject to the fulfilment of certain suspensive conditions.
SPL provides unsecured personal loans of between R5000 and R300000 to qualifying individuals on repayment terms of 12 months to six years at a fixed interest rate. The SPL loan book size was R5 billion as at 31 December 2024.
Tyme Bank is a registered bank that is involved in financial services and provides personal and business banking services and unsecured personal loans in South Africa. Tyme Bank is a fully digital bank which does not have any physical branches and instead relies on a banking application, an internet banking site and a national network of self-service kiosks that facilitate the account opening process.
Tyme Bank currently operates over 800 self-service kiosks, which equates to 15,000 retail points across the country, and has 11 million retail and business customers since launch.
Tyme Bank is controlled by Tyme Bank Holdings Limited, which is ultimately controlled by Ubuntu-Botho Investments Proprietary Limited, Sanlam’s strategic empowerment partner.
The key components of the proposed credit transaction entail the establishment by SPL of a new registered credit provider operating company for originating and administering personal loans to customers.
The existing SPL loan generation business, excluding its retail credit loan book, will be sold to the operating company in exchange for the issue of shares; the acquisition by Tyme Bank of 50% of the shares in JVCo from SPL for R31.5 million; and the sale by SPL of 50% of its retail credit loan book as at the completion of the proposed credit transaction to Tyme Bank.
The price for the SPL loan book shall be approximately R400 million plus the capital value thereof, and Tyme Bank shall share 50% of the credit life insurance results relating to the joint venture’s loan book.
SPL shall issue a reference share to Tyme Bank on the terms set out in a subscription agreement, which will target 50% of the credit life profits. The subscription price payable by Tyme Bank to SPL for the reference share shall be approximately R320 million.
In September 2024, Sanlam Life acquired a 25% interest in African Rainbow Capital Financial Services Holdings Proprietary Limited.
ARC FSH holds an effective 46.0% in Tyme Bank and is the company through which UBI indirectly holds its financial services interests of UBI.
The proposed credit transaction is a natural strategic collaboration with Tyme Bank to enhance competition and to assist both Sanlam and Tyme Bank in providing holistic and integrated product offerings to their customers. – Johannesburg Stock Exchange
