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BNP Paribas buys South African card firm

BNP Paribas said its subsidiary BNP Paribas Personal Finance is buying 100% of RCS, a retail credit card and loan provider owned by The Foschini Group and Standard Bank, in a 2.6 billion rand deal. The transaction will see BNP Paribas growing its business in South Africa from corporate and investment banking to consumer credit. In 2011, BNP Paribas opened a representative corporate and investment banking office in South Africa and acquired 60% of Cadiz Securities. Although this investment could be seen as a positive for investor confidence in South Africa, the deal by BNP Paribas Personal Finance comes as lenders in South Africa are reducing their exposure to unsecured loans due to higher levels of consumer indebtedness. Foschini, which owned 55% of RCS, said it was selling in order to focus on its retail business and expected to get 1.4 billion rand from the deal. It would use the proceeds to boost its balance sheet and for a general share repurchase.

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