Johannesburg - Having lost ground in morning trade, Standard Bank's share picked up in the afternoon after news circulated that it had bought 20 percent of Safika Holdings, the investment holding company, for an undisclosed amount.
Led by Saki Macozoma, Moss Ngoasheng and Vuli Cuba, Safika was one of a group of investors that bought 10 percent of Standard Bank and Liberty Group, the life assurer, for R5.6 billion in July last year.
Ngoasheng, the executive chairman of Safika, said yesterday that the funds from Standard Bank would be used to make acquisitions.
"We are an investment holdings company and our holdings will remain diverse," he said, refusing to be drawn on which sector of the market Safika might be scouring for purchases.
The money was not going to be used to pay off Safika's debts with regards to its joint purchase of 10 percent of the bank.
Jacko Maree, Standard Bank's chief executive, said the bank saw its relationship with Safika as a long-term commitment.
The ties between the two companies run deep.
Saki Macozoma, the deputy chairman of Safika, sits on Standard Bank's board, and Safika and Standard Bank are common investors in Andisa Capital, the securities firm, and Stanlib, the country's largest unit trust company.
Standard Bank will now have the right to appoint two non-executive directors to Safika's board.
Chris Steward, the sector head of financials at Investec Asset Management, which has about R160 billion in assets under management, said yesterday that if having a stake in Safika could open up new opportunities for Standard Bank, and the bank could participate in 20 percent of the deals by providing the funding, "then it's probably a good idea for Standard Bank to buy into Safika".
"It appears there is no danger," he added, "of Standard Bank diluting its empowerment credentials even though Safika is now not as black-owned as it used to be."
Standard Bank's acquisition of a stake in Safika has already been approved by the competition tribunal, and it became effective on Tuesday last week.
Safika was founded in 1994 and has interests in media, telecommunications, information technology, real estate, human capital development, financial services and natural resources.
Standard Bank's share price fell 45c to R64.55 yesterday, while the banking sector rose by 0.37 percent.