ZB merger at advanced stage

Published: 17 January 2014

ZB Financial Holdings says plans to merge its bank and building society are at an advanced stage and the completion of the process is expected in the next few months.

ZB Bank acting managing director, Mr Shadowsight Chiganze told The Herald Business that they were going through the required approval processes that involve various stakeholders and that they were happy with the progress achieved so far.

"The merger of our two units (ZB Bank and ZB Building Society) has reached a very advanced stage and we envisage completion in the months to come as we are currently engaging various stakeholders on the processes," said Mr Chiganze in an interview.

"The fact is that a transaction of this nature requires the group to go through an approval process that covers regulators, including the Reserve Bank of Zimbabwe, the Securities and Exchange Commission of Zimbabwe and stakeholders of both entities."

Mr Chiganze said the merger will ensure compliance with the minimum capital requirements for both the bank and the building society.

ZB Bank is already compliant while the merger will see the merged entity complying with the all requirements. The minimum capital thresholds set by then RBZ governor Dr Gideon Gono in August 2012 require commercial banks to raise their capital base to at least $100 million by June this year.

Merchant banks are also required to have a $100 million minimum capital and $80 million is required for building societies.

The capitalisation process was, however, laid down in phases where in the first phase banks were supposed to have minimum capital of $25 million by December 31, 2012 followed by $50 million by June 30, 2013 and $75 million by December 31, 2013 and eventually $100 million by June 30, 2014.

ZBFH also said the move was a strategic one that will see the two units being able to harness economies of scale that include managing the cost of doing business better.

As such this would mean better returns for the shareholders and improved service delivery to customers. At the moment the group says there is so much complementarity that exists between the bank and building society hence the need to eliminate replication especially in terms of infrastructure and resources.
- herald