Malawian Bank completes acquisition of majority stake in Barclays Zimbabwe

MALAWI Stock Exchange listed FMB Capital Holdings has completed the acquisition of a majority stake in Barclays Bank Zimbabwe after receiving approvals for all regulatory requirements. This gives FMBCH, which is registered in Mauritius, an effective 42 percent in the Zimbabwe Stock Exchange listed bank, previously owned by Barclays Bank Plc, through its investment holding unit, Afcarne Zimbabwe Holdings.

Barclays Plc retains a 10 percent stake, BBZ workers 15 percent through an Employee Share Ownership Trust and the balance of 33 percent is free float listed on the ZSE. Both FMBCH and Barclays Bank Plc said that it remains 'business as usual' with no immediate changes anticipated to its service offering and network. Further, for the first 12 months after conclusion of the deal, the local bank will continue to operate under the Barclays Bank Zimbabwe brand with the FMBCH brand being introduced over a subsequent two year period.

BBZ board chairman, Antony Mandiwanza said "The completion of this transaction marks an important juncture in the history of Barclays Bank Zimbabwe. It is testament to the successful franchise that the institution has become, particularly since dollarisation and in the current challenging macroeconomic environment, as evidenced by our 2017 half year results. ".

This transaction follows FMB's recent acquisition of Opportunity International Group's Malawi operations, Opportunity International Bank Malawi (OIBM). FMB is listed on the Malawi Stock Exchange and has two wholly owned subsidiaries incorporated in Malawi: The Leasing and Finance Company of Malawi, a licensed financial institution engaged in deposit taking and asset finance, and FMB Capital Markets Limited, a licensed portfolio manager.

The group also has interests in Capital Bank in Mozambique and Botswana, and First Capital Bank in Zambia with total assets (at the end of June 2017) of $496 million. This transaction will be the FMBCH's first operation in Zimbabwe. The banking group's liquidity position and capital adequacy has consistently remained above 55 percent and 20 percent for the past five years and its non-performing loans were at 2,7 percent as at 31 Dec 2016 despite adverse market conditions. FMB chairman, Hitesh Anadkat said "This transaction marks a significant milestone in our steps to becoming a truly African bank offering financial solutions to the region.

"We share many of the same values as our colleagues at Barclays Bank Zimbabwe and we will continue to create meaningful value for all our stakeholders, customers, employees, investors and the Zimbabwean community at large."

Barclays Zimbabwe, alongside the Egyptian business, was not part of the 2013 deal that saw Barclays Africa, formerly Absa, acquire 8 African operations from its parent company due to high local political risk. Barclays Plc sold the stake in its Zimbabwean operation for about $40 million to FMB. Initially, the acquisition figure was speculated to be $60 million, but that was before it was resolved FMB would buy a 40 percent and 67 percent stake. Before FMB beat competition from a cocktail of other suitors, a bidding war erupted between a Barclays Bank Zimbabwe senior management consortium and FMB over one of the country's oldest and most iconic banking institutions.

The Bank registered a profit after tax of $9,5 million translating to a basic earnings per share of 0,44 cents for the period (2016 – 0,15 cents per share), for the half year to June 2017, as all income lines showed improvement on prior year.