The Competition Commission has recommended that the Competition Tribunal approves the proposed transaction whereby Lesaka intends to acquire Bank Zero, without conditions.
This, after fintech group Lesaka Technologies in June announced it will acquire 100% of the issued ordinary shares of Bank Zero for R1.1 billion.
Based on a zero-fee banking model, Bank Zero launched to the public in August 2021. It is co-founded by seven investors, including former First National Bank CEO Michael Jordaan and banking innovator Yatin Narsai.
In a statement, the Competition Commission says the primary acquiring firm, Lesaka, is wholly-owned by Lesaka Technologies, a firm incorporated in the US and listed on the Nasdaq and JSE.
It notes that Lesaka provides financial technology products and services to underserved consumers and small businesses.
In South Africa, the acquiring group also provides low-cost financial services to underserviced and unbanked customers, including services such as transactional accounts, insurance and micro-loans, transaction switching and payment processing services.
The primary target firm, Zero Research, is not controlled by any firm, the regulator notes, adding that Zero Research controls Bank Zero, a mutual bank incorporated in South Africa in terms of the Mutual Banks Act. It points out that Bank Zero does not control any firm.
The target group is an app-only bank with a banking platform which enables customers to transact digitally and provides personal banking and business banking services, including transactional and cash investment accounts.
“The commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market. The proposed transaction does not raise significant public interest concerns.”
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