RCS Acquires the Absa Funded Portion of the Edcon Store Card Debtors Book

Innovative consumer finance business RCS – a subsidiary of BNP Paribas Personal Finance, European leader in financing for individuals, itself part of the French bank BNP Paribas – has acquired the Absa funded portion of the Edcon Store Card debtors book, subject to regulatory approvals. It has also secured the right to provide consumer finance products to Edcon customers, including credit cards, store cards and personal loans.

The investment cements RCS as the pre-eminent provider of outsourced credit solutions in the region, sending a clear message to the market that BNP Paribas Personal Finance is committed to South Africa.

According to Regan Adams, the CEO of RCS, becoming the preferred provider of financial solutions to one of the largest non-food retailers in South Africa, boasting a loyal customer base of approximately 10 million, has always been an ambition of RCS.

According to Adams, RCS will acquire over 1 million additional store card customers as a result of the deal. “This deal significantly strengthens our position as the leading provider of retail consumer finance products and provides the company with the opportunity to grow, for the benefit of our shareholders, our people and our customers,” says Adams.

Celebrating its 20th year in operation, RCS provides credit products for some of the largest retailers in South Africa, including Massmart, Pick n Pay, Cotton ON Group and Cape Union Mart. Currently, RCS partners with more than 26 000 retail merchants, serving more than 1.2 million customers in South Africa, Namibia and Botswana, with an established book value of over R 10 billion.

The Edcon store card portfolio is one of the largest and most well-established store credit programs in South Africa. Speaking on the strategy behind the acquisition, Adams says that the Edcon deal will add substantial scale to the RCS business. “Leveraging the national footprint of Edcon, RCS will be in a position to access over a million additional customers. With the opportunity to cross sell and market new and more innovative products to a larger market, RCS is set to increase its balance sheet and market share,” says Adams.

The deal is important to Edcon’s revised business strategy, which includes ensuring a sustainable credit business as a critical pillar. This will be done by driving growth through new credit extensions, increasing credit contributions to total sales and introducing new revenue streams.

Corporate Affairs and Communication

According to Grant Pattison, CEO of Edcon, “The deal represents an exceptional opportunity for Edcon to partner with a financially strong and well managed, reputable consumer finance business, possessing a culture and core values similar to ours. They also share the commitment to build long-term customer relationships by providing ‘service beyond expectations’. Partnering with RCS will not only grow Edcon’s credit business and customer base, but it offers our customers a more diverse and dynamic set of consumer finance solutions.”

“Edcon, in working together with RCS aims to take the lead in customer service and credit management, retaining ownership of the customer journey and improving our customer’s omnichannel experience. Our top priority is to ensure the accelerated growth of credit sales, which is key to Edcon’s turnaround plan. We look forward to strong growth in this next and promising chapter of Edcon”, concludes Pattison.

In addition to purchasing the Absa portion of the EDCON book, RCS will also acquire qualifying portions of the Edcon funded book that meet its strict risk criteria over time. The deals between Absa, RCS and Edcon remains subject to regulatory approval.

Vikas Khandelwal, CEO of BNP Paribas CIB & Head of Territory for South Africa, says that the acquisition speaks to the corner stone of the company’s philosophy, namely cultivating long term partnerships that achieve shared goals.

“The BNP Paribas Group has developed an active partnership strategy with retailers, automakers, car dealers, e- commerce businesses and other financial institutions, internationally. This deal in South Africa is at the heart of the BNP Paribas Group DNA, and we are excited for the potential that it holds,” says Khandelwal.

“The potential for growth in South Africa and the backing of BNP Paribas – the largest foreign bank in the region – has given us great confidence to pursue this deal,” concludes Adams. “The purchase of the Edcon book is in keeping with the RCS Growth strategy and demonstrates its commitment to making things possible in South Africa.”

You may also like

Popular News