ZB Financial Holdings Limited (ZBFHL) has surrendered the licence held by its building society unit and transferred all assets and liabilities to ZB Bank after the financial services concern missed numerous central banks’ minimum capital requirement deadlines.
The bank was expected to meet a minimum capital requirement of US$30m or ZWL$ equivalent effective December 31, 2022 and the building society US$20m or ZWL$ equivalent.
ZB Bank met the requirement but the building society could not.
ZBFHL chief executive officer Shepherd Fungura told Business Times that the group has considered merging these two by surrendering the building society’s licence.
“We are certainly going to surrender the licence for the building society where operations, assets and liabilities will be rolled over to the bank without prejudicing the customers of the building society.
“So far we have notified the RBZ of our intention and what we are doing is that we are processing the surrendering of the licence. When you surrender a licence certain steps need to be taken and we will do so as per the regulator’s advice,” Fungura said.
The capitalisation of the building society was deemed unnecessary as it could strain the business operations.
The merger of the two units comes more than nine years after the ZB Bank Limited board in 2014 approved the group’s amalgamation of the two units to ensure compliance with the minimum capital requirements for both the bank and the building society.
Fungura said the merger has already removed the duplication of roles while allowing them to enjoy economies of scale that include managing the cost of doing business better. “Operationally, we have moved the customers to the bank and in terms of the systems we are already using the bank’s systems. Service centres are already one.
“When the central bank has completed the process there are other governance and financial processes to be able to do the closure of ZB Building society and make sure that the assets and liabilities have moved on,” Fungura said.
“No one will be affected by that as the employees and clients have already moved to the bank. There is no duplication of roles where there was one we have already sorted out. It is not like we are going to do it but we have already done it. As we speak the assets and liabilities are already in the bank,” he said.
ZB board approved the merger of the two units in 2014 but progress was delayed following a battle for control of the group between one of the major shareholders, Transnational Holdings Limited and the National Social Security Authority.
The plans suffered a stillbirth after Transnational Holdings Limited — a direct shareholder in Intermarket Holdings Limited , which controls the building society — insisted that the transaction could only proceed once “the government-brokered settlement for the resolution of the dispute between Transnational and ZBFH over the scandalous and fraudulent acquisition of Intermarket by ZBFH was fully implemented”.