Barclays complies with Zimbabwe's indigenisation law

Barclays Bank Zimbabwe is working on an indigenisation proposal that will effectively transfer the majority ownership of the British-owned bank to locals, officials have said. Following a meeting on

Tuesday this week between Barclays managing director Mr George Guvamatanga and Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere, both parties confirmed that an agreement had been reached.

Although details of how the empowerment deal was structured were not immediately available, Herald Business understands that a significant stake would be set aside for an employee share ownership scheme.

Said Minister Kasukuwere: "We had a very fruitful meeting with Barclays Bank this afternoon (Tuesday) and in general we agreed to reorganise the ownership structure of the bank.  You can talk to the bank and they will be able to give you the details in which the employees will also benefit significantly."

Barclays is listed on the Zimbabwe Stock Exchange and as of yesterday its market capitalisation stood at US$64,5 million.  The biggest shareholder is Afcarme Holdings with a 67,7 percent stake followed by Old Mutual with 10,8 percent. Contacted for comment yesterday, Mr Guvamatanga was non-committal.

"'Barclays can confirm that the meeting took place, contents of which remain private and confidential pending further discussions. This cordial meeting was part of the ongoing engagements with the minister regarding the implementation of the Indigenisation Act," was all he was prepared to say.

Mr Guvamatanga, who is president of the Bankers’ Association of Zimbabwe, said Barclays - like other foreign-owned banks - would continue operating guided by the laws of Zimbabwe and it was up to each individual institution to engage the Indigenisation Ministry on issues of compliance.

There are seven foreign-owned banks in Zimbabwe that are required under the Indigenisation and Economic Empowerment Act to transfer 51 percent ownership to locals.

The latest development comes in the wake of divergent opinions between Minister Kasukuwere and Reserve Bank Governor Dr Gideon Gono. Dr Gono has maintained that shareholding was not the best way to indigenise foreign-owned banks opting instead for a supply side approach for the indigenisation of the financial services sector.

Under this model the central bank chief maintains that locals stand to benefit more if they were given preference to supply goods to the financial services sector.

Minister Kasukuwere, on the other hand, has maintained that after dealing with the mining and manufacturing sector, he was now shifting focus to the banking sector.

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