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NewsDay

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CBZ Holdings to merge banking units

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CBZ Holdings Limited (CBZH) is in the process of finalising the merger of its two banking arms, CBZ Bank and CBZ Building Society, a senior company executive said. The merger is expected to be completed by year end. The holdings company chief executive officer John Mangundya told an analyst briefing in Harare last week that […]

CBZ Holdings Limited (CBZH) is in the process of finalising the merger of its two banking arms, CBZ Bank and CBZ Building Society, a senior company executive said.

The merger is expected to be completed by year end. The holdings company chief executive officer John Mangundya told an analyst briefing in Harare last week that work to merge the two entities began two years ago, but had been delayed by tax-related matters.

“We are dealing with the tax issues which are delaying the financial consolidation, but all other aspects have been dealt with,” Mangudya said. “We are advocating for product taxes, rather than corporate taxes as we will continue offering building society-like products that are tax free.”

Mangudya said CBZ Building Society was currently offering mortgage lending of 10 years to its clients. The merger of the banks is expected to result in cost savings and product development. Innovation and an extended branch network would also be enhanced.

Two financial institutions, ZB Financial Holdings and FBC Holdings have already announced plans to merge their commercial and building society operations to meet the recently announced new minimum capital requirements.

Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono, recently hiked minimum capital requirements for commercial banks to $100 million from $12,5 million. Banks should be fully compliant with the new requirements by June 20 2014, but should meet 25% of the new capital levels by year end.

Minimum capital for merchant banks and building societies were raised to $80 million from $10 million. CBZH posted a profit after tax of $18,3 million for the half-year ended June 30 2012 indicating a growth of $4,6 million from the same period last year, as the group focused on improving earnings.

Interest income for the six months period was $67,5 million compared to $48,2 million the previous year. In a statement accompanying its half-year unaudited results, CBZH chairperson Luxon Zembe said during the period under review, the group focused on enhancing growth and shareholder value.