South African billionaire Michiel le Roux's bank Capitec sheds its rental finance arm

Capitec Ltd., the South African lender co-founded by billionaire Michiel le Roux, is pressing ahead with the sale of its rental finance business to Sasfin Holdings for R201 million ($12.1 million), with Chief Executive Officer Graham Lee describing the unit as a poor fit for the country's biggest retail bank by clients.

"Capitec Rental Finance is now, and kind of always has been, the odd one out," Lee told reporters at a media roundtable on the bank's interim results, according to Daily Investor. He said the effort needed to grow the business "was just disproportionate" to its returns. "We want to be focused more on the things we can do really well and really scale."

Capitec agreed in July to sell all the shares in Capitec Rental Finance to Sasfin Capital, a wholly owned subsidiary of Sasfin Holdings, for R201 million in cash, subject to customary adjustments at closing. Capitec will keep financing the business after the sale through a secured R1.6 billion ($96 million) credit facility that funds its rental receivables book.

South Africa's Competition Commission approved the deal at the end of September on condition that the parties observe a temporary moratorium on merger-related job cuts. The transaction still requires other regulatory approvals before it can close.

A leftover from the Mercantile deal

Capitec Rental Finance buys equipment and leases it to companies, mainly small and medium-sized businesses. Capitec picked it up in 2019 as part of its R3.56 billion ($214 million) acquisition of Mercantile Bank, a deal that laid the foundation for its business banking division.

The unit has grown since then. New rental agreements rose to R835.8 million ($50.2 million) in Capitec's 2026 financial year from R197.1 million in 2020, and its book reached R1.9 billion ($114 million) in the six months through August, according to Daily Investor. That is about 1.4% of Capitec's total gross lending.

Capitec has described the business as profitable and well managed but said in its interim results that "CRF's rental business does not align with Capitec's core strategic focus."

Once the sale closes, the unit will be merged into Sunlyn, Sasfin's specialist rental and equipment finance company. Sasfin, a Johannesburg-based financial group, delisted from the Johannesburg Stock Exchange in 2024 after its two largest shareholders, Unitas Enterprises and Wiphold, backed a buyout of minority investors that valued the company at R969 million. It now operates as an investment holding company.

"This is an exciting opportunity for Sunlyn and an important step in the company's growth journey," Sunlyn CEO Linda Fröhlich said when the deal was announced.

Le Roux's bank

The disposal is small next to the scale of Capitec, which reported a 19% rise in headline earnings to R9.5 billion ($570 million) for the six months through August and now serves 26.6 million active clients. The group changed its name to Capitec Ltd. from Capitec Bank Holdings Ltd. with effect from Aug. 1 to reflect a business that has moved into mobile telecoms and other services beyond banking.

Le Roux co-founded Capitec in 2001 with Jannie Mouton and Riaan Stassen, served as its first CEO until 2004 and chaired the board from 2007 to 2016. He holds more than 10% of the company, partly through his investment vehicle Kalander Sekuriteit, according to BusinessDay. Forbes values his fortune at about $3.7 billion.

In July, Kalander refinanced a hedging arrangement over 1,374,356 Capitec shares then worth about R6.56 billion ($394 million), using the stock as collateral for a loan.