HomeNews‘Premier Bank sale drastic but necessary’

‘Premier Bank sale drastic but necessary’


Premier Finance Group (PFG) executive director for investment banking George Manyere says the decision to sell the financial services group in two successive deals was a “drastic”, but “game-changing” measure for him and other shareholders who have cashed up on their equity interests.

Manyere is part of a local consortium that comprised Walter Kambwanji and Douglas Mamvura, which co-founded and owner-managed PFG – parent to a merchant bank and an asset management company, until the third quarter of 2009. Mamvura left the group last year and offloaded his bundle of shares.

The consortium last year disposed 70% of PFG to Ecobank Transnational Incorporated (Ecobank) and further diluted by half, barely a year after scaling down its shareholding to 28% following a $6 million equity investment by Germany-based African Development Corporation (ADC) and other foreign shareholders under phase 1 of PFG’s restructuring programme

The financial services group will be rebranded Ecobank during this quarter and expand its services to commercial banking on the back of a $10 million recapitalisation investment by its new parent.

“We took a drastic decision to sell the bank,” Manyere said, urging other banks to do the same to save their businesses.

“First and foremost we’re investors, we’re not managers. But we had to do it to lay a new foundation for the group.

“We’ve right-sized, we’ve attracted the capital. Hopefully, we still have the confidence. The focus now is market share. We now have a strong position to go forward.”

The funds injected by ADC were used to fund phase 1 of PFG’s restructuring programme, which entailed a systematic balance sheet clean-up and retrenchments.

The second phase, already underway, has diluted ADC to 16% and seen PFG’s take-over by Ecobank, the parent company of Africa’s leading independent banking group with a presence in 30 African countries, excluding Zimbabwe.

Manyere said equity financing was the only panacea to Zimbabwe’s recapitalisation crisis given the gravity of the liquidity squeeze besieging the economy and urged companies to treat it as one of the limited optimisation options available, not a last resort.

He believes the entry of Ecobank will change the game, as the pan-African banking group has built a broad asset base and gained vast experience of operating in Africa’s most difficult markets, including war-torn countries. It’s market cap is valued at $1,3 billion.

The Togo-based lender is owned by more than 180 000 local and international institutional and individual shareholders and offers a full—service pack of wholesale, retail, investment and transaction banking.

The Zimbabwe operation will be the Sadc cluster base headed by Dan Sackey, Ecobank’s Sadc cluster head.

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