…As group cites low trades at LSE
Dual-listed financial services group, NMBZ Holdings Limited, is set to delist from the London Stock Exchange (LSE) owing to low trading volumes, Business Times can report.
The banking group’s shareholders have to approve the delisting as a special resolution at an annual general meeting on May 12.
The financial services group has its primary listing on the Zimbabwe Stock Exchange (ZSE) and has a secondary listing on LSE, where it trades pockets of its shares.
In an AGM notice to shareholders, the group said it was incurring high regulatory compliance and administrative costs. The bank said its participation on the LSE was not benefiting the group.
The lender, however, will continue trading its shares on the ZSE.
“The directors have deemed it necessary that the company delists from the London Stock Exchange (“LSE”). This is because only a small amount of trading in the shares is conducted on the LSE. Taking into account these low trading volumes and the ongoing regulatory compliance and administrative costs the company incurs annually as a result of its London listing, the board determined that there is no significant benefit to the company in maintaining the listing,” the group said.
It said the cancellation would not adversely affect its shareholders since the company’s common shares will continue to be listed on the ZSE.
The LSE register consists of six shareholders with a total holding of 198,443 shares and the purchase of those shares by the group would not exceed the authority granted to the directors, it said.
NMBZ said LSE does not levy a charge for delisting; however there may be agency fees related to the delisting of the shares.
The costs will be minimal given the small number of shares in question.
The shareholders have to approve a share buyback scheme. A share buyback occurs when a company uses cash on hand to buy and retire some of its own shares in the open market. Also known as stock repurchase, it tends to boost share prices in the short-term, as the buying reduces the supply of outstanding shares and the buying itself bids the share higher in the market.
In its financial results for the year to December 31, 2021, NMBZ reported a 125% increase in profit to ZWL$849.2m from ZWL$377.2m reported in prior year owing to various investments which were hedged against in an inflationary environment.
Operating income was ZWL$2.1bn, down from the previous year’s figure of ZWL$3bn while operating expenditure increased by 18% to ZWL $1.2bn from ZWL$1.07bn in 2019 due to staff rationalisation and Covid-19 related expenditure to ensure the safety of NMB Bank customers and staff.
The bank’s total assets increased by 17% to ZWL$10.95bn from ZWL$9.37bn reported in 2019 due to a 125% increase in investment securities, a 60% increase in investment properties and a 25% increase in property and equipment.
NMB total deposits increased by 17% to ZWL$6.26bn as of December 31, 2020 from ZWL$5.34bn as of December 31 2019.
Basic earnings per share were ZWL$2.10 compared to ZWL$0.96 in 2019.