Divisional reviewsBusiness servicesFinancial Services

Bidvest Bank accounted for significant one-off costs that included branch closure costs, which forms part of the Bank’s digital journey. There were also credit impairment charges on a few single name exposures where the lagged effect of the pandemic and national lockdown caught-up. Market demand for fleet and forex-related products remain muted, exacerbated by channel-to-market changes. At the same time, the deployment of capital was slower than anticipated and approved pay-outs were delayed due to vehicle stock shortages. The deposit base is stable, with liquidity and capital adequacy ratios healthy. Core lending activities are improving, with credit processes optimised to enable speed of execution.

Bidvest Insurance reported lower policy sales, but claims were well managed and cost reductions have been achieved, largely as a result of internalising certain functions. The investment income recognised on the investment portfolio declined significantly, year on year, as it bore the brunt of challenging markets and global market uncertainties.

Bidvest Life remained lossmaking. Disappointing policy sales and high costs are receiving focused attention.

FinGlobal performed as expected post legislative changes. Compendium delivered a good performance with revenue and trading profit growing.

Looking forward

The division is well capitalised and positioned for new client growth. Niche sectors for growth have been identified and the necessary industry skills and resources have been secured. Innovative ways of financing female owned business are being implemented. The growing renewable energy sector has become a key focus area, with plans initiated to direct financing and insurance products for assets dedicated to associated infrastructure.

There are also opportunities to optimise divisional cross sell synergies, specifically across distribution channels, information technology and compliance, while providing turn-key solutions throughout the customer base. Being part of the broader Bidvest Group is a key advantage with product growth success being achieved along other Bidvest companies. Plans are in place to expand this even further.

While the availability of key skills is a challenge, the implementation of the division’s digitisation strategy is being advanced, taking clients on a digital transformation journey. This is expected to optimise and create better efficiencies by improving processes, ultimately leading to revenue growth.