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Malawian bank eyes Barclays Bank Zimbabwe

by Staff reporter
29 Mar 2017 at 06:59hrs | Views
Malawian banking group First Merchant Bank (FMB) is in talks with Barclays PLC to buy its Zimbabwean unit.

Last year, Barclays PLC downgraded Barclays Zimbabwe to its non-core division with an intention to dispose it in the future.

Barclays PLC owns 68% shareholding in Barclays Zimbabwe.

In a cautionary statement yesterday, FMB said it was engaged in "exclusive discussions with Barclays Bank PLC (BB PLC), in relation to the potential acquisition of its interests in Barclays Bank Zimbabwe Limited (BBZ)".

"Discussions with BB PLC are ongoing and may or may not result in the announcement of a transaction involving the acquisition by FMBCH of the interest of BB PLC in BBZ. Such transaction would also be subject to obtaining approval of the banking regulators in Malawi and Zimbabwe," it said.

The banking group is listed on the Malawi Stock Exchange.

The group is undergoing a corporate restructuring after three principal shareholders, representing 55% of the issued capital of FMB said they intended to transfer their shares in FMB to FMB Capital Holdings Plc (FMBCH), a company incorporated in Mauritius, in exchange for shares in FMBCH. Subsequently, FMBCH will make an offer on the same terms to acquire the remaining 45% of the issued shares of FMB. At the conclusion of the offer period, the shares of FMBCH will be listed on the Malawi Stock Exchange.

The interest from FMB came after the British multi-national banking giant said it could not continue to combine Barclays Bank Zimbabwe with Barclays Africa Group Limited, as the business "is no longer a good fit with Barclays' core strategy".

It also said it would reduce its 62,3% interest in Barclays Africa Group Limited over the coming two to three years to a level, which would allow it to be deconsolidated from a legal and regulatory perspective.

In its financial results for 2016, Barclays Bank Zimbabwe posted a profit after tax of $10,8 million up from $3,9 million in 2015. This translated to a basic earnings per share of 0,50 cents up from 0,18 cents in 2015.

Barclays Zimbabwe was the fifth largest capitalised commercial bank as at December 31, according to statistics from the central bank.

Its core capital was $46,4 million behind CBZ ($205,7 million), Stanbic ($86,1 million), BancABC ($67,9 million) and Standard Chartered ($57,4 million) against the minimum threshold of $25 million. Banks should have minimum capital of $100 million by 2020.

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Source - newsday
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