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A business banker inspired by entrepreneurs

Karl Kumbier heads up South Africa’s only niche bank that specialises in financial products and services for entrepreneurs. Now on a mission to double the bank’s market share, he wants the brand to better represent what its clients need from a business bank. Monique Verduyn spoke to him

Karl Kumbier, CEO of Mercantile Bank, is justifiably proud. The business and commercial bank’s head office in Sandown has been totally redesigned. It’s a renovation project that has converted the once dated building into a stylish, open environment, enhancing teamwork and collaboration.

Most of the remodelling, which is soon to be completed, was managed internally with minimal downtime in a project carried out floor by floor. In addition to creating a modern, functional workspace for employees, the project is part of the bank’s overhaul of its brand, an exercise that is key to Kumbier’s strategy to double its business in the next five years.

“Our goal is simple, and everyone in the organisation knows what it is – to double our market share,” says Kumbier. “That sounds like a mammoth task, but we currently have just 1% of the business market, while the big banks own the rest. All we want is to grow our share to 2%. Considering that we have operated largely under the radar, now is the time for us to develop our brand like never before.”


Kumbier developed a passion for banking early on in his career. He was encouraged to become a CA(SA) by his mother. However, after a year at Stellenbosch he realised that going to lectures every day was not for him. At the time he was selected to play for a South African baseball team to tour Europe. At a training session, he met one of the partners at PriceWaterhouse.

“I asked him blatantly if he could get me a job and he said yes,” Kumbier recalls. “I’m not sure if he expected me to take him up on it, but I did. I spent the next year working at PW and studying part-time at Unisa. Once I started putting into practice what I was learning, my marks shot through the roof. I completed my degree in three years, which was quite tough when you are studying part time.”

In 1995 he enrolled at the University of Cape Town to obtain his Postgraduate Diploma in Accounting (PGDA). At the time UCT had the highest board exam pass rate in the country. Kumbier passed, after working harder than he ever had in his life.

After that he discovered just how many doors a CA(SA) qualification can open. He was transferred to PW’s Cape Town office to participate in large audits. To make himself even more marketable, he spent six months in the tax department. But he was also a keen rugby player and when the opportunity came for him to join a team in the UK, he used his connections to find a job at Guardian Royal Exchange, a former British insurance company that was a client of PW’s. It was like winning the lotto.

“I got to play rugby in the UK and work as a CA for a whole wonderful year. By 1998 I knew that although I was not a bad rugby player, it wouldn’t put bread on the table. I returned to South Africa and helped my father with his textile business. The industry was in trouble at the time and I could see it was going nowhere so I decided to start a corporate career and joined Control Instruments as the group financial manager. Again, my qualification and my relationship with PW threw the door open for me.”


But Kumbier’s real interest lay in investment banking, which he had learnt about in his time as an auditor. He joined Standard Corporate and Merchant Bank and worked for the Investment Banking Solutions division. In 2001, he also began his studies as a chartered financial analyst (CFA), which took three years to complete.

“I have always believed that it’s important to differentiate yourself from the competition,” he says. “In the banking environment there are hundreds of CAs(SA). It really pays off to add to your skills all the time.”

His next move was into Standard Bank’s business banking division, where he set up a leveraged finance team from scratch. By the time he moved on, the lending book reached R250 million and the following year reached R1 billion. It was from there that he entered retail banking in the Western Cape as the Personal and Business Banking Provincial Director. It was a great opportunity to build on his people management skills where they undertook a complete culture change in the province where their Investors in People rating went from 3 out of 10 to 10 out of 10 in a space of one year. This is a great example of how you can in a short space of time improve staff morale in leaps and bounds.

When the Standard Bank group started looking for a chief operations officer for Stanbic Bank in Ghana, Kumbier was an obvious choice. He spent two years there with his family, assisting in growing the bank’s footprint from three branches to 21. By then his experience in growing business, transforming employee culture, hiring the right people, and setting up infrastructure was significant. He received a call from a head-hunter asking him if he’d be interested in an opportunity at Mercantile Bank. By then Kumbier was keen to return to South Africa. He found the idea of a small business bank quite compelling, especially since he had been following the career of his former Standard Bank colleague, Dave Brown, who had moved on to become head of Mercantile. After a fruitful meeting with the board he was appointed as an executive director in 2010. Two years later, as part of the succession plan, he became deputy CEO and eventually took over the reins from Brown in 2013.

“Banks like Capitec and Investec have done extremely well in a short space of time compared to the major financial institutions,” he says. “The reason is simple. The markets they serve, low-income customers and high net worth individuals respectively, have been poorly serviced in the past. Similarly, the business banking sector has been underserved for years. Turnaround times are unacceptable, there is a huge churn of relationship managers, and few employees are able to make decisions. These are factors that impact negatively on the entrepreneurial market, where people need quick solutions for growth.”

His passion for the SME sector is what’s driving the bank’s growth. Mercantile’s market made up of a diverse range of businesses and includes companies with an annual turnover from R5 million to R1 billion. Kumbier points out that the bank does not target start-ups but rather puts its weight behind entrepreneurs with a proven track record.

“By turning the bank into a premium brand, we have the opportunity to create an organisation with a R20 billion balance sheet in the next five years,” he says. “Times have been tough, but we have a lot on our side: a brand new core banking system, sufficient capital, liquidity, and a clean lending book. It’s a solid foundation for growth.”

Kumbier insists that one of the bank’s strongest assets is its relationships – both with customers and stakeholders. Mercantile does not lose customers, he says, and his team is continuously doing market research to ensure they provide the products and services that customers are most interested in.

“We are a business bank inspired by entrepreneurs,” he adds. “As a small bank, we have to offer products the same as or better than our competitors. That’s why we’ve introduced chip and pin credit cards, and we’re going paperless.”

As an example, within the next six months, a customer service representative will visit a customer, complete the customer’s details on an iPad, take photos of the necessary FICA documents and ensure they receive a credit card with in two days, which is music to any South African consumer’s ears.


But it’s with structuring deals for customers that Kumbier really wants to set the bank apart. Mercantile has set up an integrated sales team specialising in structured lending transactions based on his and various team members previous experience in investment banking, and in less than one year that division has written more than R600 million worth of new business.

The bank is also aiming to increase the size of its footprint in the country while making its operations more cost-effective. Mercantile recently opened its first purpose-built business centre for entrepreneurs in Sandton. The aim is to increase ease of banking by speeding up transacting and reducing the time a business owner has to spend attending to financial admin. The new centres – in Sandton, Horizon and Menlyn – have on-site bulk cash recycling machines that enable safe withdrawal, deposit and counting of large amounts of cash. Business owners who do not have access to facilities such as meeting rooms can also book a boardroom at the bank where they can meet with clients.

“This initiative forms part of our positioning as a niche business bank that specialises in providing financial products and services to entrepreneurs in a modern banking environment,” Kumbier says. “These centres are taking up half the space they used to, but the design makes them look bigger than ever.”

Today Mercantile Bank has a national footprint of 15 fully transactional business centres in four provinces – Gauteng, Western Cape, KwaZulu-Natal and Free State – all of which will be converted to the new format. As the leases for each centre come up for renewal, the bank will also decide whether to stay or move on to areas which offer improved brand visibility. The bank will be opening an additional ten business centres across the country over the next five years.


Ask Kumbier what type of leader he is and he’ll tell you that he is a team player and likes to lead by example. You’ll always find him on the frontline, working long, hard hours. That said, he likes to give people leeway and encourages them to empower themselves. But he’s tough on those who do not deliver. He is becoming renowned for the coffee sessions he has with ten staff members at a time, during which they discuss what’s working and what’s not over lattés from Vida e Caffè. One of the best suggestions thus far, he notes, has been for a monthly party on the new deck at head office.

Among the business leaders he most admires is Jamie Dimon, known for the number of successful and profitable acquisitions he made as CEO of JP Morgan Chase. “He has been extremely successful at growing businesses, which is what I aim to do here. To take the bank to the next level, we needed to get our people fired up and ensure they have the tools to do the job, and we are doing that. We have also doubled our training budget and will do so for the next couple of years.”

Although Mercantile Bank’s mandate remains focused on South Africa, through its holding company Caixa Geral De Depósitos, one of the largest banks in Portugal, the bank is also able to facilitate trade flows between South Africa, Mozambique and Angola. The Portuguese connection recently caused a setback when an acquisition had to be halted because the European Union has come down hard on Portuguese banks and will not allow them or their subsidiaries to engage in acquisitions.

“It was a setback, however Caixa is in the process of appealing the decision but in the meantime we’ve moved on and concentrated on growing our business organically. As an example we recently concluded a deal with the largest distributor of fruit and vegetables in the Western Cape which has given us their business after more than 50 years with a competitor. We’re also seeing lots of opportunity for growth on the Rental Finance side. We acquired a controlling stake in a rental finance business and have grown the book from R30 million to R450 million in a space of three years. We will also be launching an exciting new product targeting the entrepreneur later this year, but I can’t reveal the details just yet.”

Does work–life balance exist for such an energetic CEO? Kumbier says yes. “Right from day one, when I studied part-time, I would get home from work, study form 8.00 pm to 10.00 pm every night, and then again on Sundays, which is now when I got to work to catch up on email, planning and reading. Saturday is strictly family time. It’s a level of discipline I have been able to apply ever since my student days.”


Hard work is a given. Ask any CA(SA) and they’ll agree. What Kumbier says is key, is to stay ahead by building relationships. His career is certainly an example of what can happen when you stay in touch with the right people. “The wonderful thing about qualifying as a CA(SA) is that you have the opportunity to learn so much about so many different types of business from a wide range of interesting and talented people.” ❐

Author: Monique Verduyn