LIVINGSTONE MARUFU
Listed financial services group, ZB Financial Holdings (ZBFH), is expediting minority shareholders buy out from its subsidiaries ZB Bank, ZB Building Society and Interbank Banking Corporation as it seeks to control the units.
The development comes after ZBFHL resolved its long standing legal dispute with Nicholas Vingirai’s Transitional Holdings Limited (THL) over the ownership of Intermarket Holdings Limited (IHL).
This saw THL recently withdrew its appeal at the Supreme Court of Zimbabwe following a settlement arrangement in which the Government of Zimbabwe ceded its shareholding in ZBFHL to THL.
“The snapping up of minority interests in ZB Bank Limited, ZB Building Society, Interbank Banking Corporation should have been concluded by 2007 but businessman Vingirai’s THL gave us a headache and complicated the whole thing.
“But with Vingirai withdrawing his case from the Supreme Court, we are heading for a successful conclusion of the deal.
“This will allow the smooth operation of the group as all SBUs will be wholly owned by the group,” a source close to the developments told Business Times.
In a recent notice to shareholders, ZB company secretary Tinashe Masiiwa said the acquisition of shares was progressing well.
“Further to the cautionary announcement dated March 29, 2022, shareholders and members of the investing public are advised that discussions on the potential transfer of assets and acquisitions of minority interests in ZB Bank Limited, ZB Building Society, Interbank Banking Corporation are in progress, if successfully concluded, may have a material effect on Company’s securities,”
“Accordingly shareholders and members of the investing public are advised to exercise caution when dealing with the company’s securities until a full announcement is made,” Masiiwa said.
Government through the Reserve Bank of Zimbabwe seized IHL in 2004, saying it was bailing out troubled banks at the height of hyperinflation.
The administration later sold IHL to ZB.
Assets that belonged to THL included Intermarket Building Society, Intermarket Discount House, Intermarket Life Assurance, and a considerable equity stake in Mashonaland Holdings.
These form the bulk of the ZB group’s asset base.
For more than 10 years, Vingirai has been pushing for a mutual separation of the ZB and IHL, which have been operating as a single entity.
However, a few years ago, the government and Vingirai appeared to have struck a deal after the administration offered more than 20% stake to Vingirai.
The National Social Security Authority (NSSA), which was a major shareholder in the group then with 37.8% stake, resisted the allocation of further shares to THL, which had 21.44% shareholding, resulting in Vingirai approaching the Supreme Court.
However, NSSA, which also forced the removal of three THL nominees to ZB board — Mike Mahachi, Mike Manyika and Zororo Muranda, including the return of Vingirai as a non-executive director, has since offloaded its stake in ZB.
In a trading update for the third quarter to September 30 2021, ZB’s total income increased by 1% to ZWL$5.9bn from ZWL$5.8bn achieved in the prior comparative period.
An average interest margin of 30% was achieved for the quarter, from 18% during Q320.
Gross insurance premiums increased by 22% with the related insurance expenses reducing by 16% between third quarter of 2021 and the same period in 2020.
The net insurance income increased overall by 37% reflecting the combined effect of increased business and further improvement in risk selection.
Banking commissions increased by 130% against the background of a 16% increase in the number of accounts and higher levels of utilisation of electronic banking channels.
Operating expenses, however, increased by 90% to ZWL$3.8bn in the quarter under review from ZWL$2bn in the same quarter in 2020.
Total assets increased by 24% to ZWL$31.7bn in the reviewed period from ZWL$25.6bn at December 31, 2020.
Income earning assets constituted 60% of total assets.
The group maintained an aggregated liquidity ratio above 60% which was adequate to accommodate short term fluctuations in customer demands.
The loan book increased by 89% as the group continued to increase its participation in supporting the growth of the economy.
Asset quality remained good with the non-performing loans ratio having been contained at the rate of 5% throughout the period.
The growth of assets was supported by a 64% increase in deposits and other funding accounts from ZWL$9.6bn as at December 31, 2020 to ZWL$15.7bn as at September 30 2021, following money supply trends on the market.
