Divisional overviews – Financial Services

Japie van Niekerk     Commercial Products

Japie van Niekerk
Chief executive

Bidvest Financial Services’ diversification strategy is paying off, resulting in an excellent year. Trading profit increased 7,4% for the year, which follows an exceptional 2016 financial year. Moody’s upgraded Bidvest Bank’s long-term national scale rating to Aa2 from A1. Bidvest Bank remains the highest rated among South Africa’s second tier banks.

 

Contribution to
trading profit

10%

Moody’s upgraded Bidvest Bank’s rating to Aa2
Leasing revenue grew
Insurance delivered pleasing result

Salient features

  • Bidvest Bank drove improvements in its leasing revenue as well as trading and investment income.
  • The Botswana Bureau has new management, which is initiating a turnaround and tightly controlling costs.
  • The insurance business completed 2017 with a pleasing contribution.
Driving innovation

Innovation and technological advancement is vital in a sector as fast moving as financial services. In achieving our position as the leading second tier bank in South Africa, Bidvest Bank has been able to move rapidly, and act responsively.

Our innovation and diversification is serving our customers well, giving them the solutions that, in turn, allow them to “get it done” smarter and faster. This ethos is driven by an entrepreneurial mindset, service excellence, market and technological innovation, as well as strategic, value-adding partnerships.

We have revolutionised our core banking system and we are implementing the largest information technology intervention in the history of the bank. This new operating system is expected to have a significant positive impact on our customer’s interaction with the bank.

Several exciting new banking and insurance products have been launched, which, added to our recent acquisitions, enhances and diversifies our product and service offering. Expansion in our fleet management and transactional banking offering continues, and we have launched our new business banking offering. Additional acquisitions will be made in the new financial year as we continue to diversify our income streams, products and services in both the banking and insurance sectors.

We continue to invest heavily in technical skills, infrastructure and systems, as well as in risk monitoring and mitigation strategies, with a focus on cyber risk.

Sustainable growth

Bidvest Financial Services remains committed to the development and wellbeing of the communities we serve. Our socio-economic investments have, since inception, focused on community-based initiatives, job creation and education.

We are pleased to have opened our Bidvest Financial Services Academy in Cape Town and Durban, to complement the academy already operating in Johannesburg. In the year under review, we successfully placed 100% of the academy graduates internally – a development which dovetails with our focus on education and job creation.

The financial service industry is fast changing, and we continue to train our employees to remain ahead of the curve. There has been an excellent uptake among our existing senior-level staff for the banking level five qualification. Training spend increased 42% year-on-year.

Enterprise development is a key deliverable in many of our tenders, and we are successful in this regard, particularly in our fleet leasing operations.

B-BBEE initiatives continue to be a focus as we strive to contribute to the betterment of South Africa.

Going beyond

There is a rising demand for a well-capitalised, nimble and flexible player in the financial services sector, which ultimately drives our strategy.

As a low-risk, high-quality choice and independent partner, we are well positioned to show growth in a challenging market, where regulatory and compliance costs remain a challenge. We have a prudent lending philosophy and will not take undue risk in our efforts to grow.

Bidvest Bank remains a well-capitalised institution and a major player in full-maintenance leasing and foreign exchange. The bank is diversifying its offering and expanding to become a full-service provider to its target market. While the latest Moody’s ratings upgrade affirms the bank’s strategic focus on diversifying its income streams, it also opens the bank to more business opportunities, which we are increasingly seeing materialise.

Our focus going forward is on growing the business via a combination of organic growth, bolstered by acquisitions with a promise of a good pipeline of new business.

Financial Services
Financial Services