Patrice Motesepe’s TymeBank, Rain face COVID-19 hiccups
Patrice Motsepe-backedcompanies Rain and TymeBank experienced some hiccups during the COVID-19 lockdown.
African Rainbow Capital (ARC), which was founded by billionaire Motsepe, this week gave a trading update on the Johannesburg Stock Exchange.
ARC controls digital bank TymeBank, while it has a 20.7% interest in data-only network, Rain.
In the trading update, ARC says the announcement provides shareholders with a high-level update of the company’s progress and an overview of the significant investments in the ARC Fund for the first quarter following the financial year ended 30 June 2020, as well as a commentary regarding significant developments up to the end of November 2020.
According to ARC, the telecommunications business Rain continued to expand its 4G and 5G data network in the metro areas in South Africa during the period.
However, it points out that the Rain business has experienced certain customer service challenges following the strong growth in enrolling new customers, as significantly more people than expected engaged in online and digital activity during the lockdown period.
On TymeBank, it says, the digital entrant is tracking slightly behind its projections to attract clients, largely due to the national lockdown and the sustained financial pressure on consumers.
Nonetheless, ARC points out that the high demand for Rain’s data solutions during the initial phases of the national lockdown has tapered off somewhat, but new customer flows remained strong, especially for Rain’s unlimited data packages.
Rain launched its 5G network in September 2019, making South Africa one of the first countries in the world to deploy this new technology, and the roll out has continued successfully in Johannesburg and Cape Town during the review period, says the company.
“Significant progress has been made to improve customer service levels,” ARC says.
It notes that Rain recently announced that the current Group CEO, Willem Roos, will become a non-executive director on 1 March 2021, after the completion of his three-year contract.
He will be succeeded by Brandon Leigh, the current head of strategy, as incoming CEO, in line with the company’s succession planning. There will be a six-month handover period to ensure a smooth transition.
On the digital bank, ARC says following its official launch on 26 February 2019, TymeBank succeeded in acquiring one million clients by November 2019.
As at 30 November 2020, it adds, the bank had acquired 2.5 million clients, of which approximately 1.5 million were actively using their accounts.
It continues to onboard on average 100 000 customers per month or an average of 25 000 customers each week.
“In terms of growing the bank’s product portfolio, it has concluded one bancassurance partnership and is in the process of piloting a second bancassurance partnership which will enable TymeBank to provide a broader suite of products to its clients. It is further planning to enter the market with innovative lending products in the first half of 2021.”