🏦SARB wants to Kill Prime Rate & Blu Label Goes Electric

South Africa's central bank (SARB) just fired a 25-year-old employee who contributed basically nothing except confusion. I’m talking about the prime lending rate - that weird 350-basis-point markup that's been glued to the repo rate since 2001 - is getting retired. The SARB wants R3.2 trillion in loans to price directly against the repo rate instead. Banks aren't losing any power here. They'll still set their own margins. The difference? Now you'll actually know what you're paying for. Onto today’s edition.

•  SARB kills the prime rate - SA's central bank published a consultation paper proposing the repo rate replace prime as the benchmark for all loan contracts. More than 12 million contracts worth R3.2 trillion are affected. Earliest transition: 2027.

•  Motsepe steps back at ARM - Patrice Motsepe, SA's only Black dollar billionaire, retires as executive chairman of African Rainbow Minerals effective 16 February - moving to non-executive chair to comply with new JSE governance rules. Jacob van der Bijl named COO.

•  Pictet plants its flag in Africa - Geneva's 220-year-old Banque Pictet opens its first-ever African office in SA. Africa's millionaire population is forecast to surge 65% over the next decade.

• 📊 SA dominates Africa M&A - South Africa captured 35% of Africa's total M&A deal value in 2025, ahead of Kenya (20%) and Egypt (15%), per Herbert Smith Freehills Kramer. And financial services posted the biggest jump in transaction volume.

• ⚡ Blu Label goes electric - BluEnergy Trading, a subsidiary of JSE-listed Blu Label Unlimited, lands a multi-year electricity trading licence from NERSA - pivoting the prepaid payments group into SA's power reform story.

LEAD TRANSACTIONS

1. The end of "prime minus" - SARB wants to retire a 25-year-old relic

If you work in lending, or have a loan of any kind this is for you. South Africa's central bank dropped a bombshell on Monday that will reshape how every home loan, car deal, and business overdraft is priced in this country.

What’s happening? The South African Reserve Bank published a consultation paper proposing the complete retirement of the prime lending rate - replacing it with the SARB's own policy rate (the repo rate) as the reference benchmark for all loan contracts. Prime currently sits at 10.25%, locked at exactly 350 basis points above the repo rate of 6.75%, a spread that has not moved since 2001. SARB says it’s become bureaucratic.

Who will this affect? : More than 12 million contracts with an estimated value exceeding R3.2 trillion ($200 billion) are linked to prime - consumer loans and mortgages alone account for roughly a third. Any institution with meaningful retail or corporate lending exposure in SA needs to model the transition risk and start stakeholder conversations now. The SARB is also simultaneously phasing out JIBAR (the estimated interbank lending benchmark - what banks charge when they lend from each other) in favour of ZARONIA (interbank interest rate based on past transaction data) by end-2026. Banks face a dual benchmark transition while managing existing loan books.

When does this kickoff? : Transition begins no earlier than 2027. Stakeholders have until 20 March to submit comments on the consultation paper. For consumers, the shift creates price transparency: loan pricing expressed directly against repo makes it easier to compare offers across banks. For banks, the spread over repo becomes the explicit risk margin rather than a blended figure nobody quite understands.

So what? : This is ultimately good news for financial literacy and credit market transparency in SA. The short-term complexity is going to be very real - contract renegotiations, system updates, customer communications - but the long-term result is a cleaner link between monetary policy decisions and what South Africans actually pay to borrow.

Pictet arrives in Africa - and it's not here for the casual tourist

In 220 years of operation, Banque Pictet - Switzerland's second-largest bank and Europe's largest privately held financial institution - had never set foot in Africa. That changed this week.

Who are Banque Pictet? : The Geneva-based private bank, with $942 billion (R15 trillion) in assets under management, opened a representative office in South Africa after the Prudential Authority granted regulatory approval. Pictet targets clients with at least $3 million in investable assets, offering wealth management, family office services, and investment advisory for ultra-high-net-worth individuals and institutions. The timing is deliberate: Africa's millionaire population is forecast to grow 65% over the next decade, driven by business expansion, rising commodity wealth, and deeper capital markets. More than a third of the continent's private wealth currently concentrates in South Africa.

Why now? : Pictet's arrival signals that global private banks now see African wealth management as a structural growth opportunity - not an afterthought. For banking executives building private banking and wealth management strategies on the continent, the competitive landscape is hardening. Pictet joins a market where Investec has long operated and where Revolut is waiting on a banking licence. HSBC exited SA after 30 years in September 2024. New entrants arriving while established players exit says something important about who is winning the ultra-HNW segment.

Zoom in: Pictet does not take deposits from the public, does not extend commercial loans, and explicitly avoids investment banking. Its model is purely advisory and discretionary wealth management. That means it competes directly for the client relationships - and AUM - that SA's big four banks have spent decades building in their private banking divisions. The Pictet family itself, estimated at CHF 6 billion in wealth, still runs the bank through a partnership structure where ownership cannot be inherited.

Be smart: Watch for follow-on moves from other European private banks. If Pictet validated the SA entry case, expect similar representative offices from Lombard Odier, Julius Baer, or Rothschild within 18 months.

3. SA kills it in M&A - but the story behind the numbers matters more

What’s happening? South Africa captured 35% of Africa's total M&A deal value in 2025, leading the continent ahead of Kenya (20%) and Egypt (15%), according to Herbert Smith Freehills Kramer's Global M&A Outlook 2026. The three markets combined accounted for roughly 70% of total deal value across the continent. Financial services posted the biggest year-on-year jump in transaction volume, and five inbound deals valued above $1 billion crossed the finish line across Africa.

Why it matters: The headline number masks two competing narratives. Inbound deal value into Africa rose over 40% and outbound deal value jumped nearly as sharply - pointing to renewed international confidence in African markets as a relatively neutral destination for capital amid US-China trade tensions. At the same time, mega-deal volume declined, pulled down by global geopolitical uncertainty, higher acquisition financing costs, and trade tensions. Fewer large deals means the aggregate numbers look healthy, but the deal-making engine is running at lower intensity than the raw value suggests.

State of play: Switzerland ranked as the largest acquirer by value - $3.4 billion across six transactions - followed by Japan ($3 billion, eight deals) and the UK ($2.7 billion, 35 transactions). The US led in deal count at 50 transactions. Gold Fields' $3.7 billion acquisition of Australia's Gold Road Resources was one of the year's biggest outbound deals. On the regulatory side, SA's Competition Tribunal decided 103 large mergers in 2024/25 with just one prohibition - a near-record approval rate suggesting SA deal-making friction is lower than many executives assume.

So What? Merge and Prosper : For executives evaluating market entry into SA, the M&A environment is as accommodating as it has been in years. The proposed raising of mandatory notification thresholds (target firm: R100M to R175M; combined: R600M to R1B) will reduce regulatory drag on mid-market transactions once finalised.

COMPLIANCE DESK

Regulatory moves across the continent

TRADING FLOOR

What's moving money this week

Telkom had a week of two halves. Telkom crossed 25 million mobile subscribers with mobile data subscriptions up 29% to 19 million - momentum that drove group data revenue 9.6% higher and pushed shares up nearly 6% on Monday. The bad news: BCX, Telkom's enterprise IT arm, posted a 9.3% revenue decline in Q3 as corporate clients tighten spending. CEO Jonas Bogoshi retires at the end of February after seven years, with 28-year Telkom veteran Hasnain Motlekar stepping in as acting CEO from 1 March. Telkom has previously flagged openness to a strategic partner or minority stake sale in BCX.

MTN is reconsidering a decade of tower divestments. Africa's largest telco is in advanced talks for a $2.7B acquisition of IHS Towers - reversing its own asset-light strategy after selling 5,700 South African towers to the same company in 2022. The deal would bring 37,000+ towers across seven markets back under direct control. MTN already holds 25%. No binding agreement exists yet.

When Washington closes doors, Beijing opens them. Trade Minister Parks Tau signed a Framework Agreement on Economic Partnership with China - with an "Early Harvest Agreement" targeting duty-free export access expected by end-March, covering mining, agriculture, renewable energy, and technology. Context: Trump imposed 30% tariffs on SA exports in August 2025, the highest rate in sub-Saharan Africa.

Nigeria's Airtel is trying to make SmartCash happen. The telecom giant's Payment Service Bank arm - currently sitting at just 2.2 million users and $6 million in revenue against OPay's 100 million daily transactions - is launching free transfers, a flat 15% savings interest rate, and cashback on bill payments. Structural problem: PSB regulations prohibit lending, which is where OPay and PalmPay built their dominance. Incentives alone rarely close that kind of structural gap. But Airtel has 60+ million telecom subscribers and 500,000 agents - a distribution footprint worth watching.

Lesaka Technologies posted its first profit since launching in 2022. The SA digital payments fintech recorded a net profit of R61 million ($3.6M) in Q2 FY2026, swinging from a R589M loss a year earlier. Consumer segment revenue rose 38%, enterprise grew 58%, and Lesaka now claims 14.3% market share in consumer payments - making it SA's second largest in that category behind Capitec. The drag: merchant division revenue fell 13% as airtime margins compressed. Lesaka's R1.09B acquisition of Bank Zero - a digital lender - awaits final Prudential Authority approval.

Patrice Motsepe steps back but stays close. ARM's founder retired as executive chairman effective 16 February under new JSE governance rules barring chairs from holding executive director status - moving to non-executive chair. He remains on the board with strategic influence. Q2 FY2026 results drop 25 February.

Blu Label's BluEnergy just became an electricity trader. The JSE-listed prepaid payments group secured a multi-year NERSA electricity trading licence on Tuesday - connecting municipalities with independent power producers via Cigicell's existing prepaid vending infrastructure in 95+ municipalities across nine provinces. Blu Label has been selling prepaid electricity tokens since 2004, generating low margins. The trading licence lets it capture value across the full energy chain, not just at the vending point.

WHAT TO WATCH

🔧 TOOLKIT

• SARB consultation paper on prime rate - Submit comments by 20 March

• Herbert Smith Freehills Kramer: Africa M&A Outlook 2026 - Full regional M&A breakdown and deal forecasts

• WeeTracker: Africa's Top 10 Most Active Startup Investors 2025 - Fundraising context for investors mapping the continent

ON THIS DAY

17 February 1864 - The United States enacted the National Bank Act, establishing a system of nationally chartered banks and a uniform national currency. Before this law, each American bank issued their own banknotes - meaning the US had hundreds of competing currencies circulating simultaneously, with wildly different values and trust levels depending on which bank printed them. The US took 77 years after the National Bank Act to create the Federal Reserve.

______________________________________________________________________________________________