Net1 grows stake in European bank in bid to expand fintech reach
Technology group buys an additional 35% of Liechtenstein-based Bank Frick
Technology group Net1 UEPS says it has bought an additional 35% in Liechtenstein-based Bank Frick & Co for $46.4m (R707.99m) in an effort to expand its fintech services.
The JSE and Nasdaq-listed firm is diversifying further into new geographies as it seeks other revenue streams after the loss of a multibillion contract to distribute social grants in SA.
Bank Frick focuses on providing products and services for financial intermediaries such as asset managers, payment service providers and fintechs.
The transaction takes Net1’s total shareholding in the bank to 70% of Bank Frick with the Kuno Frick Family Foundation owning the remaining 30% interest.
Over the past three years, Net1 CEO Herman Kotzé said the group has an established presence in Europe, where it has acquired certifications and licences to operate its technologies.
“We gave ourselves two years to determine if the market is viable and to complete the development of the technology required to compete effectively,” said Kotzé.
The group “negotiated the option to take a controlling stake in the bank as we believe it is imperative to have control over the full stack of licences, certifications and card scheme memberships required to offer a vertically integrated service, at the lowest possible cost, to our customers — instead of being reliant on third-party providers”.
“We expect the transaction to be accretive to fiscal 2021 fundamental earnings,” Kotzé said.
Mario Frick, chair of Bank Frick said, “with the combination of Bank Frick and Net1, we will be able to strengthen our current business areas, drive forward our fintech strategy, develop new digital business models and roll them out across Europe”.