Grindrod is seeking to retain as many as possible of the 5.4 million bank accounts it's set to lose following South Africa’s decision to appoint a new distributor of welfare grants, tempting recipients with affordable banking services such as EasyPay.
Government has asked the Post Office to handle more than $10 billion of annual social security payments after cancelling an arrangement with Net1 UEPS Technologies earlier this year. Grindrod’s banking arm had a partnership with Net1’s Cash Paymaster Services, in which millions of grant beneficiaries that used banks were automatically Grindrod clients because that’s how they accessed their cash.
Remgro, the investment vehicle of Johann Rupert, owns about 23% of Grindrod, which also has investments in transportation. The businessman has a net worth of $7.4bn (R100bn) and is South Africa’s richest man, according to the Bloomberg Billionaires Index.
Grindrod Bank’s profit is likely to decline by 20% if the company can’t retain welfare recipients as customers in some capacity, according to David Polkinghorne, managing director of the division. EasyPay accounts charge customers monthly fees of R6.91, lower than grant recipients are currently paying to Grindrod and CPS combined.
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