JOHANNESBURG (Reuters) - VBS Mutual Bank, which made headlines last year after it gave South African President Jacob Zuma a loan to reimburse the state for upgrades to his personal home, plans to list on the Johannesburg Securities Exchange, its chairman said on Thursday.
The bank lent Zuma 7.8 million rand ($582,000) after a court ordered he pay back part of the $16 million the state spent on his luxury home.
The lender, whose clients are mostly rural homebuilders or small businesses, plans to expand from only four branches now to a nationwide network, chairman Tshifhiwa Matodzi said.
“It is a no-brainer to list within the next 3 years,” Matodzi told Reuters after a media conference.
VBS has its roots in a 1980s building society based in Venda, a rural area given a degree of autonomy by the apartheid government before 1994. It has 30,000 clients with deposits of around 800 million rand ($59.71 million).
“First we will convert from a mutual bank to a bank, then we will list on the JSE,” Matodzi said, adding that the institution wanted to broaden its shareholder base.
Though VBS got plenty of publicity for the loan to Zuma last year, the president is not among VBS’s biggest debtors, having “maybe one of the top-20 home loans,” said Matodzi.
The Public Investment Corporation, Africa’s largest fund manager with more than $120 billion of South African government employee pension assets under its custody, is a major shareholder in VBS, holding 25 percent.
The lender on Thursday signed an agreement with a church group to issue cards to the church’s 6.8 million members. Though they will not automatically bank with VBS, the bank said it hoped to sign them all up eventually.
($1 = 13.3992 rand)
Reporting by TJ Strydom; Editing by James Macharia and Richard Lough
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