CBZ seeks nod to merge units

Marc Holtzman

ZIMBABWE’S biggest banking group is set to merge its major units, as it seeks to unlock shareholder value.

CBZ Holdings Limited (CBZHL) will merge its flagship commercial banking unit, CBZ Bank Limited and CBZ Building Society, according to a statement released by the Reserve Bank of Zimbabwe (RBZ), which said the financial institution had applied to Finance minister Mthuli Ncube for approval.

The proposed transaction comes as CBZ is seeking to create a domestic and regional multi-asset class business in the financial services sector.

“It is hereby notified, in terms of section 25(4) of the Banking Act, that CBZ Bank Limited and CBZ Building Society, both incorporated under the laws of Zimbabwe and carrying on banking business, have applied to the Minister of Finance and Economic Development…for his approval of the amalgamation of CBZ Bank Limited and CBZ Building Society,” read part of the statement released by the RBZ.

The central bank said in order to facilitate the transaction, the two institutions proposed to consolidate under one entity, CBZ Bank Limited.

Subsequent to the merger, CBZ Building Society will cease to exist as an entity and will give CBZ Holdings a combined investment value of over $1 billion.

“The memorandum of agreement in terms of which the amalgamation is to be effected will be open for inspection by members of the public for a period of 21 days from the date of publication of this notice in the Government Gazette,” said the RBZ.

The merger completes a process that began in 2010 when the group started an operational integration process between the bank and the building society, resulting in the former offering a one-stop shop facility to its clients.

This meant that the group offered banking and home financing products and services under one roof.

Operationally, this consolidation also meant that CBZ Building Society branches had been integrated into the commercial bank.

Services offered by the building society are now being offered in CBZ branches, bringing cost saving for both the group and its clients.

There have been several consolidations at CBZ Holdings in the past year.

In November, the National Social Security Authority (Nssa) consolidated its shareholding in the financial services powerhouse, as it intensified a long-held ambition to pounce on the most viable stocks in the blue-chip league.

Following a deal in which more than US$60 million exchanged hands, Nssa shored up its interest in the group to between 27% and 28%, becoming the largest stockholder.

Previously, the State-run compulsory pension fund had a 18% stake in the business.

Nssa, in turn, disposed of 31,22% of its shareholding in listed financial services giant, First Mutual Holdings Limited (FML) to CBZH, which is said to have paid for part of the deal in hard currency.

The transaction saw Nssa overtaking a nominee called Akribos, which had emerged as the biggest shareholder in CBZH following a surprise transaction in 2020, which left the vehicle controlling the largest stake, followed by the government with 21,07% and Libyan Foreign Bank.