africa Banking Finance M&A Mozambique

Mozambique: Arise Fund to become Mozabanco minority shareholder

Approximate reading time: 2 minutes

Kuhanha, the company that manages the Bank of Mozambique’s pension fund on Tuesday signed a memorandum of understanding under which the investment company Arise Fund will enter the commercial bank Moza Banco as a minority shareholder.

Kuhanha is the majority shareholder in Moza Banco following recapitalisation in early 2017. Moza Banco had entered a liquidity crisis the previous year, and the Bank of Mozambique stepped in to prevent a collapse.

Since at the time Moza Banco was the fourth largest of the country’s commercial banks, a collapse would have had serious repercussions across the financial system. The central bank injected funds to keep Moza Banco operating, sacked its board of directors and installed a temporary replacement.

The recapitalisation resulted in Kuhanya owning 80 per cent of the bank. The Portuguese Novo Banco, which previously owned 49 per cent, and Mozambique Capitais, with 50.9 percent, now each own 10 per cent.

Arise fund is the first new shareholder to enter Moza Banco since the recapitalisation. Arise Fund is already a shareholder in a small Mozambican commercial bank, Banco Terra, and Kuhanya announced that Moza intends to acquire Banco Terra.

“With the consolidation of these institutions, in a framework of sustainable growth, Moza Banco will become one of the three main banks in the national financial system”, said the Kuhanya release.

The Kuhanya Chief Executive Officer, Felicidade Banze, said she was excited at the prospect of a partnership with Arise Fund. “We are anxious to build an increasingly profitable and sustainable bank which will contribute to a better future for the people of Mozambique”, she added.

The CEO of Arise Fund, Deepak Malik, said “the synergies offered by this relation between Arise and Kuhanya will put Moza Banco in a better position to serve Mozambicans and promote financial inclusion”.

“This partnership”, he continued, “is in harmony with the vision of Arise of contributing to the development of the banking sector in Africa, and thus to economic growth and job creation”.

Arise Fund was set up by three investors, namely Rabobank (the second largest bank in Holland, in terms of assets), the Norwegian development finance institution Norfund, and the Dutch Development Bank, FMO. Currently Arise fund manages assets in excess of 660 million US dollars in more than ten countries.

Source: AllAfrica

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