‘ZB merger by year end’


Listed financial services group, ZB Financial Holdings (ZBFH) says the merger between its two banking units – its flagship commercial bank ZB Bank Limited and ZB Building Society—is expected to be completed by year-end.

Merging the two units is meant to cut costs and ensure that the bank reaches the minimum capital requirement of US$30m or ZWL$ equivalent by December 31 2021.

Company secretary, Tinashe Masiiwa said the merger will also remove the duplication of roles in the institution.

“The merger of the bank and building society is expected before the end of the year and is a key part to the capital management plan,” Masiiwa said.

He said the group was confident of meeting the Tier1 bank requirement for its banking operations, prescribed by the Reserve Bank of Zimbabwe.

Shareholders of ZBFH approved the plan to combine the two units in 2013.

But, the process has taken longer than expected after it was stalled at some stage because of the fierce battle for control of ZBFH between one of the major shareholders, the Transnational Holdings Limited led by Nicholas Vingirai and the National Social Security Authority (NSSA).

NSSA has since sold its 37.79% shareholding.

In anticipation of the approval, ZBFH has already consolidated the staff and most operations of the two units.

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

This would mean better returns to shareholders and improved service to customers.

Once consolidated, the bank is expected to be one of the biggest in the country.

The group’s total income for the first quarter to March 31, 2021 dropped by 10% to ZWL$1.3bn from ZWL$1.5bn in the prior comparative period.

Net interest and trading income increased by 194% during the reviewed period compared to the same period last year on the back of a 15% increase in the loan book and trading assets.

An average interest margin of 27% was achieved for the quarter, showing an increase from 15% during the first quarter of 2020.

Banking commissions increased by 44% against the background of a 12% increase in the number of accounts.

Masiiwa said there was a 21% reduction in the aggregate number of transactions between the first quarter of 2021 and the first quarter of 2020.

Operating  expenses increased by 47% to ZWL$844m from ZWL$575.7m during the same period last year.

Total assets increased by 11% to ZWL$22.9bn as at March 31 2021 from ZWL$20.5bn as at December 31 2020.

Masiiwa said the growth of assets was supported by a 19% increase in deposits and other funding accounts to ZWL$9.5bn from ZWL$7.9bn following money supply trends in the market.

Related Articles

Leave a Reply

Back to top button