The tie-up between Interfin Banking Corporation (IBC) and CFX that was solemnised by the Ministry of Finance and the central bank last month has further strengthened the banking group’s balance sheet simultaneously enhancing its ability to underwrite big business.
Managing director, Raymond Njanike, said substantial growth in the commercial bank’s balance sheet has been registered post the consolidation of the CFX asset into Interfin along with the improved size and number of transactions that have gone through the bank.
A balance sheet reflects the financial position or health of any institution. It captures the liabilities, assets and ownership equity of a business or organisation.
One of the most visible spin-offs of the tie-up has been the growth in IBC’s market share. From 3 % prior the amalgamation, Interfin’s market share now stands at about 5 %.
Management, also taking advantage of the anticipated recovery in the country’s economy, is working flat out to grow the share of the market to 15 % by June next year.
The country’s economy is projected to grow by 9,1 % next year from 8,1 % this year, driven by an estimated 47 % increase in mining output, agriculture and telecommunications.
“Our ability to lend large amounts of money has been enhanced by the consolidation of CFX into Interfin and so has been our ability to secure lines of credit, whose sourcing is largely dependent on the strength of a bank’s balance sheet,” said Njanike.
Interfin, a listed group founded more than a decade ago, first became a controlling shareholder in CFX in November last year after underwriting the then troubled institution’s rights issue which had attracted a poor response from subscribers.
Later, Interfin was to secure the approval of its stakeholders to acquire the assets of CFX, leading to its reverse listing on the local bourse.
And last month, the Ministry of Finance and the Reserve Bank of Zimbabwe gave IBC chairman Timothy Chiganze the thumbs-up to proceed with the amalgamation of the businesses.
The green light came hard on the heels of another endorsement of the transaction by the Competition and Tariff Commission, which okayed the deal about a month ago.
Njanike said the Interfin group subsidiary is presently focused on spreading its roots domestically before setting its sights on high-hanging fruits in the region and beyond.
Forays into the region would currently be limited to partnerships and strategic alliances where there are opportunities for business, without necessarily having to establish a physical presence.
In line with this strategy, the next few months would see considerable effort going into growing IBC’s branch network.
Last week the bank opened its ninth branch in Gweru, a strong mining and cattle ranching town situated about 275 kilometres from Harare.