Standard Bank Group (SBG) is providing an additional R1.5-billion facility to Old Mutual Finance, Old Mutual's consumer finance business. Standard Bank Group is sole debt underwriter in the deal.
Wendt Saurma-Jeltsch, Standard Bank Group's Director of Investment Banking Coverage, Corporate and Investment Banking, says: "The deal is all about strengthening relationships. This is the second loan facility transaction Standard Bank Group has entered into with Old Mutual Finance, having advanced a first loan facility of R1-billion last year. Standard Bank is firmly committed to the ongoing relationship with the Old Mutual Group and Old Mutual Finance's strong expansion path."
The expansion of Old Mutual Finance has meant that the initial three-year facility was in need of replenishment and has (as at 30 June 2011) been supplemented with a further committed three-year R1.5-billion funding facility. Standard Bank Group's total commitment to Old Mutual Finance in this time amounts to R2.5-billion.
"Standard Bank South Africa has a long and proud association with the Old Mutual Group, having been the trustees of Old Mutual Unit Trusts since 1968. When we identified the opportunity to introduce further funding into Old Mutual Finance, we rapidly assessed the opportunity to provide the client with a tailor-made funding package to support the company's growth plans," says Mr Saurma-Jeltsch.
The deal is a combination of term funding and revolving credit facility through to 2014.
"Old Mutual Finance has grown its advances book over the past year - primarily because of its values of integrity, trust, success, nurturing and empowering - and we recognised further requirement for capital," he explains.
"A key differentiator to win the business was Standard Bank's willingness to invest time to build a deep understanding of the client's business and provide an integrated holistic solution across the various divisions of Standard Bank Group's corporate and investment banking division."
Mr Saurma-Jeltsch says that when dealing with a major multi-banked client like the Old Mutual Group, its strategy is to have multiple touch points, not only at executive level, but at product business unit level and a relationship team on the ground to coordinate all communications.
Stuart Marshall, Chief Executive Officer, Old Mutual Finance, says: "I would like to take the opportunity to thank Standard Bank for the great effort that was put in to make this Second Funding Facility a reality. Standard Bank South Africa is now a R2.5-billion stakeholder in Old Mutual Finance and your involvement, support and commitment is highly appreciated.
"At Old Mutual Finance, we take time to understand our clients and their needs. That customer commitment is why we have a good quality book and book performance ahead of market averages," says Mr Marshall.
Old Mutual Finance is a consumer finance business, offering a variety of personal loan products to the mass market from a growing network of 150 branches. It is part of Old Mutual plc, the international long-term savings, investment and protection group, listed on the London and Johannesburg securities exchanges.
Old Mutual Finance offers its clients a comprehensive plan - covering personal loans, consolidation of debt, future planning, monthly cash payments, death, disability and retrenchment cover. The Old Mutual Finance products enables clients that have multiple existing loans save thousands of rands on initiation fees and monthly administration charges.
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