Capital Bank Group – FMB Bank & Barclays Zimbabwe deal set to go ahead

Mauritius based FMB Capital Holdings Plc (FMBCH), the holding company for FMB Group, has announced the successful acquisition of a majority shareholding in Afcarme Zimbabwe Holdings (Pvt) Limited, the holding company for Barclays Bank of Zimbabwe Limited (BBZ) from Barclays Bank PLC (BBPLC).

The transaction was concluded after all the Zimbabwean statutory and regulatory requirements were fulfilled. FMB Group also has banking operations in Malawi, Mozambique, Zambia and Botswana.

The move sees FMBCH acquiring a 42% shareholding in BBZ with Barclays PLC retaining a 10% stake (employees hold 15% through an Employee Share Ownership Trust and the remaining 33% are listed on the Zimbabwe Stock Exchange).

Despite the change of ownership both FMBCH and Barclays have stressed that its ‘business as usual’ with no immediate changes anticipated to its service offering and network. For the first 12 months after conclusion of the deal, the bank will continue to operate under the Barclays brand and the FMBCH brand being introduced over a subsequent two-year period.

Speaking at the signing in London, FMBCH Director, Hitesh Anadkat said ‘This transaction marks a significant milestone in our steps to becoming a truly African bank offering financial solutions to the region. We share many of the same values as our colleagues at Barclays and we will continue to create meaningful value for all our stakeholders – customers, employees, investors and the Zimbabwean community at large.’ He added ‘For our regional customers our Zimbabwean operation will serve to further facilitate and enhance their cross-border trade operations through our expanded footprint.’

In Mozambique FMB Group owns 70% in Capital Bank Mozambique, giving it effective control of the local operation. Commenting on the conclusion of the deal, Capital Bank’s Chief Executive Officer Jorge Stock said, ‘With our shared border this development will only serve to offer more benefits to our regional customers. Together with our new partners in Zimbabwe we see enormous opportunities for mutually beneficial co-operation – particularly in terms of cross border trade and investment.’

In Mozambique, Capital Bank has been positioned to catalyse SMEs’ and national entrepreneurs’ growth of by leveraging their businesses, offering them a committed offer and a team mobilized for quality and speed of the services to be provided.

The Bank is committed to a medium- to long-term expansion strategy in Mozambique, based on the sustained growth of its operation and the expansion of its commercial network to the rest of the country. The move will see FMBCH double its asset base. For its last financial year the group had total capital of US$74 million and total assets of US$452 million. Barclays Zimbabwe had total capital of US$65 million and total assets of US$470 million. In 2016/17 the FMB group recorded US$12.8 million net profit after tax and Barclays Zimbabwe a net profit after tax of US$10.4 million.

This transaction follows the recent acquisition of Opportunity International Group’s Malawi operations, Opportunity International Bank Malawi (OIBM) by FMBCH’s subsidiary FMB Malawi. FMBCH is listed on the Malawi Stock Exchange where it owns and operates FMB Bank, The Leasing and Finance Company of Malawi Limited, a licensed financial institution engaged in deposit taking and asset finance, and FMB Capital Markets Limited, a licensed portfolio manager. In addition to its Zambian operation, the Group also has interests in Capital Bank Limited in Mozambique and Botswana with total assets (at the end of June 2017) of USD 496Mn. This transaction will be FMBCH’s first operation in Zimbabwe.

About the FMB group

FMB is an entrepreneurial banking group committed to innovation, customer service and sustainable value creation for investors, employees and other stakeholders through its operations in both the commercial/corporate and retail sectors which it serves in Malawi, Zambia, Botswana and Mozambique. It and its associates employ a combined 950+ people through 250 physical contact points including offices, branches and ATMs.

In 2016/17 FMB reported total income of US$48 million and a return on equity of 23%. Customer deposits amounted to US$311 million and loans and advances to US$181 million. Founded in 1995, the group remains highly liquid and enjoys long-standing partnerships with respected organisations including the European Investment Bank, the International Finance Corporation and USAID as well as several of the world’s other leading development finance institutions. Correspondent banks include Citibank, Deutsche Bank, ABSA and Standard Bank. The Global Credit Rating Company has consistently, over 10 years, given a long-term rating of A+ and a short-term rating of A1 to FMB Malawi, the group’s flagship operation.

First Merchant Bank Limited is a public limited liability company incorporated in Malawi under the Malawi Companies Act. It is listed on the Malawi Stock Exchange and is registered as a commercial bank under the Banking Act 2010.

Source: CapitalBank Press release

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