ZBFH to surrender building society licence by year-end

Financial services group ZB Financial Holdings (ZBFH) has announced its intention to comply with the Reserve Bank of Zimbabwe's (RBZ) conditions to surrender the licence of its building society unit by the end of 2025.

The central bank requires all building societies in Zimbabwe to maintain a minimum capital level of US$20 million or its equivalent in local currency. According to ZBFH's 2024 annual report, the building society had failed to meet this threshold in previous years, prompting the group to offer to surrender the subsidiary's licence.

"As a result, the Reserve Bank of Zimbabwe (RBZ) issued a corrective order against the society on 2 July 2024 to rectify the capital shortfall," ZBFH said in its report.

The group has responded by implementing resolutions approved by its directors on 1 December 2022 and its shareholders on 31 July 2024 to voluntarily surrender the building society's operating licence to the RBZ.

ZBFH further disclosed that the RBZ has stipulated conditions that must be met before the licence surrender can be finalized. These include fulfilling information requests and ensuring that customer deposits are managed in compliance with the Consumer Protection Framework No. 1-2017/BSD. The building society is currently working to meet these requirements.

"The directors have assessed these conditions required by RBZ for the surrender of the licence and concluded that it is highly probable it will comply with the conditions before 31 December 2025," the report stated.

The building society has a long history, having been established pre-independence as Founders Building Society and granted a trading licence in 1961. It was later renamed Intermarket Building Society and subsequently ZB Building Society following ZBFH's acquisition of a majority stake in Intermarket Holdings Limited.

ZBFH described the building society's core business as mobilizing deposits and extending advances to individuals and corporate clients secured by these deposits.

The group's financial performance for the year showed significant growth. Deposits and related funding balances rose by 120% to ZiG5.48 billion, driven by increased United States dollar deposits across sectors. Gross advances surged to ZiG4.15 billion from ZiG2.21 billion the previous year, supported by loans, overdrafts, and other credit facilities.

Looking ahead, ZBFH has started preparations for its next medium-term plan, focusing on long-term sustainability as a strategic priority. The group is pursuing certification under the central bank-led Sustainability Standards Certification Initiative through the European Organisation for Sustainable Development.

ZBFH CEO Shepherd Fungura said, "The group has begun to lay the foundation for the next medium-term plan, with sustainability at its core. We are committed to aligning with global best practices as we position ourselves for future growth."