South African Billionaire Le Roux Boosts Investment in Cyprus’ Avafin

Capitec Bank, a famous South African retail bank co-founded by billionaire Michiel Le Roux, has acquired a majority position in Avafin Holding, a Cyprus-based digital non-bank consumer lender, for R500 million ($26.76 million).

The transaction, which is pending regulatory approval from the SA Reserve Bank’s Financial Surveillance Department and the Polish competition authorities, represents a significant step forward for Capitec Bank’s internationalization plan.

Avafin Holding, formerly Cream Finance, is an international online consumer loan provider with products in Poland, Latvia, Georgia, the Czech Republic, Mexico, and Denmark. With the transaction, Capitec Bank’s stake of Avafin will expand from 40.66 percent to 97.69 percent, making Avafin a subsidiary of the South African bank.

Capitec Bank CEO Gerrie Fourie sees this move as a strategic opportunity to diversify income streams and develop their footprint in other markets. Fourie remarked, “Acquiring a controlling position in Avafin is a strategic opportunity to diversify our revenue streams and improve on our knowledge in overseas markets.

“We intend to capitalize on synergies between the two companies while expanding our reach in the online consumer lending industry. “We believe this acquisition will position Capitec well for future growth,” Gerrie Fourie remarked.

Michiel Le Roux, Jannie Mouton, and Riaan Stassen started Capitec Bank two decades ago, and it has since grown to become a worldwide recognized banking brand. The bank, a key player in South Africa, offers transactional banking and a wide range of loan products, including term loans, credit facilities, and credit cards.

With a market capitalization of R245 billion ($13.13 billion), Capitec’s strategic acquisition of Avafin is a significant step toward breaking into the European market. Le Roux, one of Africa’s wealthiest persons, derives the majority of his $1.2 billion fortune from his 11.39 percent share in Capitec Bank.

In the following months, Capitec will face key regulatory obstacles as well as the burden of seamlessly integrating Avafin’s activities. Investors and analysts will keep a close eye on this endeavor, as its success might shift Capitec’s development trajectory and establish its position as a key innovation in the global digital banking market.

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