TymeBank, a digital bank that is owned by billionaire Patrice Motsepe, announced on Tuesday that its partnership with the Zion Christian Church (ZCC) has been delayed.
The bank is targeting 12 million churchgoers of Zion Christian Church (ZCC) as clients.
The partnership was announced in February, but the spread of COVID-19 pandemic has delayed its finalisation. For more read: Patrice Motsepe’s TymeBank Targets 12m ZCC Members
“The impact of COVID-19 on the bank has resulted in the delay in the roll out of its partnership with the Zion Christian Church (ZCC) as well as a change in its unsecured personal lending proposition,” African Rainbow Capital (ARC) said on Tuesday.
While TymeBank was operational during the lockdown period facilitated by its kiosks being situated in the retail environment, it did experience some challenges in terms of lower customer acquisition numbers and reduced transactional volumes, said ARC.
“This together with the uncertain economic environment particularly the pressure on the consumer, as a result of COVID-19, did require a revisit of the TymeBank strategy and changes to its revenue and cost model, with the result being a broader and diversified product offering to break even complemented with a streamlined, more efficient cost base. A write down of R121 million was recognised.”
Motsepe bought a majority stake in TymeBank in 2018.
TymeBank is a digital bank that leverages the use of digital biometric technology to make banking simple and affordable and is focused on banking the unbanked and under serviced in South Africa.
“At 30 June 2020 the bank had on boarded 1.9 million customers, which is ahead of its business plan,” said ARC.
The bank is onboarding between 3 000 and 3 500 customers per day, with half of the customers actively using their bank accounts.
“TymeBank is well positioned within the SA banking sector to implement its unique low-cost banking fee model as well as customer experience value propositions,” said ARC.
Furthermore, ARC Financial Services injected an additional R750 million into TymeBank during the reporting period as part of the scheduled capital requirements for the new bank.
At 30 June 2020 the ARC Fund has an effective ownership interest of 35.18% in TymeBank, being its 49.9% of the 70.5% interest that ARC Financial Services holds in TymeBank.
ARC Fund’s effective capital contribution to TymeBank was R374 million for the year ended 30 June 2020. – email@example.com