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 | Standard Bank and African Bank joint venture coming to an end |  |  |
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30 May 2006
Standard Bank has given African Bank 12 months notice of the termination of their joint venture in respect of mass-market lending.
In 2000 the two banks signed a joint venture by African Bank loans were sold through Standard Bank branches and AutoBank E outlets, and African Bank would sell Standard Bank E Plan accounts through its network. The partners jointly contributed an initial R500 million to the venture, and have successfully managed to distribute over R2.1 billion in loans to 582 000 customers.
The original agreement was for four years with an option for each bank to give a year's notice to withdraw from the partnership. In terms of the agreement each partner will continue to deliver on its obligations for 12 months. After that the loan book will be winded down for a further 36 months.
Says Jacko Maree, Standard Bank Chief Executive: "We are very pleased with the performance of the joint venture and our close relationship with African Bank, and although it is difficult to end such a good relationship, both banks have amicably agreed to pursue their own goals in mass market lending."
"The mass-market segment is one of Standard Bank's most exciting business areas, and plays an integral role in our business strategy locally and in the future in other emerging markets. The bank has been committed to this market for a long time, developing appropriate products and services that match the aspirations of our customers in this market."
Maree says "mass-market lending continues to be a top priority in this market, and the move to deliver this on our own is another step towards enhancing our franchise within this market."
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