HomeBusinessCanadian bank snaps 9,5% stake in AfrAsia

Canadian bank snaps 9,5% stake in AfrAsia

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A CANADIAN bank has acquired a 9,5% stake in AfrAsia Bank Limited (ABL), the major shareholder in AfrAsia Bank Zimbabwe, in a move that could support ABL’s efforts to revive its local unit.

BUSINESS REPORTER

The National Bank of Canada (NBC), Canadian’s sixth largest bank, will acquire a 9,5% stake with the aim of further increasing its shareholding in the near future.

ABL said having NBC as a shareholder would enhance its growth plans and strategic vision which has been clearly validated by favourable responses from existing investors, including Singaporean private equity firm Intrasia Capital and French partner PROPARCO.

“This is very exciting news indeed as it demonstrates ABL’s already-stated commitment to Africa, including Zimbabwe. While this strategic partnership may not translate immediately into an injection of liquidity, it shows our faith in the Zimbabwean economy and country, and we shall continue to pursue avenues to
grow our business here,” ABL chief executive officer James Benoit said.

ABL said the strategic move would further help the bank in its initiatives to have new shareholders on board for its Zimbabwe operations and would support its efforts to secure the fortunes of AfrAsia Zimbabwe Holdings Limited.

“We have continually invested in developing our bank to become a significant player in the region, in Africa, as well as internationally. We are honoured to partner with a renowned financial institution such as NBC. This partnership will give us an impetus for further growth and will reinforce the position of AfrAsia Bank in international markets,” Benoit said.

The president and chief executive officer of NBC, Louis Vachon, said the bank was pleased to partner with ABL.

“This investment will be the first by the National Bank of Canada in Africa. We believe fast-growing and emerging economies offer attractive market opportunities,” Vachon said.

NBC is an integrated provider of financial services to retail, commercial, corporate and institutional clients and offers a complete range of services, including banking and investment solutions, securities brokerage, insurance and wealth management.

AfrAsia Bank Zimbabwe has been facing liquidity constraints with depositors failing to withdraw their monies.

In his maiden monetary policy statement, Reserve Bank of Zimbabwe governor John Mangudya said AfrAsia Bank Zimbabwe, alongside MetBank, Tetrad and Allied Bank, were under the close supervision of the central bank as they were facing liquidity and solvency constraints.

Mangudya said the central bank was satisfied with efforts being done by AfrAsia shareholder who raised $10 million which improved the bank’s capital to $19,20 million.

Last month, AfrAsia Bank launched an Investor Information Memorandum outlining its strategies targeting local and international investors.

It said the exercise had received an expression of interest for an equity raise from well-known private African equity firms, international investors and banks.

In 2011, ABL bought 35% in the then Kingdom Financial Holdings Limited founded by Nigel Chanakira.

It renamed the group AfrAsia Zimbabwe Holdings. ABL increased its shareholding to over 50% last year.

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