- CBZ Holdings, FBC Holdings, and ZB Financial Holdings have all played a pivotal role in shaping Zimbabwe’s banking sector this year.
- One of the most notable transactions in 2023 involves CBZ’s acquisition of a 36.35 per cent stake in First Mutual Holdings Limited.
- 2023 saw FBC Holdings execute a strategic move by acquiring Standard Chartered Bank Zimbabwe Limited.
This year has proven to be a transformative period for Zimbabwe’s banking sector, witnessing significant acquisitions that have reshaped the landscape. In particular, three major players, CBZ Holdings Limited (CBZ), FBC Holdings Limited (FBC), and ZB Financial Holdings (ZB), have played a pivotal role in these developments.
These acquisitions signify a dynamic shift in Zimbabwe’s banking sector, with key players strategically positioning themselves for growth and market dominance.
Acquisitions shaping Zimbabwe’s banking sector
One of the most notable transactions in 2023 involves CBZ’s acquisition of a 36.35 per cent stake in First Mutual Holdings Limited (FMHL). Initiated in October 2021, the deal saw CBZ Holdings acquiring FMHL shares held by the National Social Security Authority (NSSA). The proposed transaction was valued at US$21,197,440 (ZWL$ 6,355,922,132.00), with a combination of cash (30 per cent) and the issuance of new CBZ Holdings shares (70 per cent).
Additionally, 30 per cent of the total consideration, that is, ZWL$1,906,776,639.60, was intended to be settled in cash. This amount comprised ZWL$1,815,353,056 as the net cash proceeds due to NSSA, after deducting trading transaction costs of ZWL$91,423,584. The net cash proceeds of ZWL$1,815,353,056 for NSSA translate to US$21,197,440 after being converted at the agreed exchange rate of ZWL$85.6402/US$.
Of the US$21,197,440, a deposit of US$10,000,000 was paid within ten days of the fulfilment or waiver of the conditions precedent, with the balance of US$11,197,440 being paid over 18 months in three equal instalments of US$3,732,480.
CBZ, already holding 3.23 per cent in FMHL, aimed to consolidate its position by reaching approximately 34.45 per cent through this acquisition. The long-term strategy involved obtaining a control block in FMHL, constituting 35 per cent of the total shares. Notably, this transaction is considered a related party transaction due to NSSA’s significant stake (18.17 per cent) in CBZ.
Following the NSSA transaction, CBZ acquired a control block in FMHL. On September 5, 2023, CBZ acquired 1.9 per cent of FMHL shares, and on September 6, 2023, it acquired an additional 31.22 per cent, resulting in a total of 36.35 per cent shareholding.
Before the NSSA transaction, CBZ held 23 per cent through a proxy, PIM Nominees (Private) Limited. The shares were beneficially held through Datvest Nominees before the NSSA shares were acquired and transferred to CBZHL as a direct holder on September 28, 2023.
According to Reuters, CBZ Holdings Limited is a diversified financial services company listed on the Zimbabwe Stock Exchange (ZSE). The company’s segments include Banking Operations, Mortgage Finance, Asset Management, Insurance Operations, Property Investments, Agro Business, Micro Finance, and Other Operations.
The banking operations segment offers commercial banking products through retail, corporate, and merchant banking. The mortgage finance segment provides mortgage financing to clients for personal and commercial purposes.
The asset management segment offers fund management services, while the insurance segment provides short-term insurance and life assurance. The property investment segment offers property investment services.
The agro-business segment provides contract farming loans to both individual and commercial farmers. The microfinance segment offers financial services to the informal sector, civil servants, and smallholder farmers, while the other operations segment includes equity investments by the holding company.
According to African Financials, First Mutual Holdings Limited has served Zimbabwe for over a century, providing economic dignity through its strategic business units.
The group has diverse interests in life assurance, health insurance, short-term insurance, short-term re-insurance, long-term re-insurance, wealth management, the property sector, funeral services, and microfinance.
These are housed under various subsidiaries: First Mutual Life, First Mutual Health, Nicoz Diamond Insurance, First Mutual Re-insurance, FMRE Property & Casualty (Botswana), First Mutual Wealth Management, First Mutual Properties, First Mutual Funeral Services, and First Mutual Microfinance. First Mutual Holdings Limited is listed on the Zimbabwe Stock Exchange.
Per the ZSE Listing Requirements and the Companies and Other Business Entities Act (Chapter 24:31), CBZ Holdings must make a Mandatory Offer to all remaining First Mutual Holdings shareholders.
CBZ has also been accumulating a stake in another financial giant, ZB Financial Holdings and would like to consolidate all these into one unit.
Also read: Zimbabwe’s manufacturing sector dominates mergers, acquisitions in 2021
FBC Holdings’ takeover of Standard Chartered Bank Zimbabwe Limited
The deal results from Standard Chartered’s decision to divest from several markets, including Lebanon, Angola, Cameroon, Gambia, Sierra Leone, Zimbabwe, and Jordan. Additionally, it involves exiting the CPBB (Consumer Private and Business Banking) business in Côte d’Ivoire and Tanzania as part of its strategic realignment efforts.
FBCH will also acquire the economic interest in Africa Enterprise Network Trust, whose primary asset is a 20.7 per cent shareholding in Mashonaland Holdings. FBC Holdings is committed to retaining all Standard Chartered Bank Zimbabwe employees, ensuring a seamless transition for clients and staff.
Winning the bid against other investors, FBC Holdings marks a significant step in consolidating its market share and expanding its customer base. As reported by Zimbabwe Independent on January 20, 2023, five investors had submitted their bids. Notably, CBZ Holdings, Zimbabwe’s largest bank by balance sheet, and FBC Holdings expressed interest, while FNB of South Africa reportedly also showed interest.
According to sources, Nedbank, another South African bank, was reportedly eyeing a portion of the acquisition through its shareholder, Old Mutual Zimbabwe. A consortium representing Zimbabwean entrepreneurs was also on the bidders’ list. With the recent announcement, FBC Holdings emerged as the successful bidder.
Also read: FBC Holdings to acquire Standard Chartered Bank Zimbabwe.
ZB Financial Holdings Group’s controlling interest in Mashonaland Holdings Limited
ZB Financial Holdings has successfully acquired a controlling interest in Mashonaland Holdings Limited. The announcement of the offer to acquire minority shares on December 20, 2022, and the offer period commenced on December 21, 2022, concluding on January 27, 2023. As a result, the ZB Group now holds a 50.58 per cent shareholding in Mashonaland Holdings.
According to ZBH, 73,970 shares were tendered for the offer to minorities, representing 0.0044 per cent. Minority shareholders’ holdings have reduced to 833,930,561 shares, constituting 49.41 per cent of the total issued. Following the offer to minorities, ZBFH, and its associates now hold 853,822,947 shares, representing 50.58 per cent of the total shares in issue.
According to Reuters, ZB Financial Holdings Limited, a Zimbabwe-based company listed on the Zimbabwe Stock Exchange, provides diversified financial services across three segments: Banking Operations, Insurance Operations, and Other Strategic Investments.
The Banking Operations segment includes corporate banking, international banking, investment banking, partners, transfer secretaries, property services, and small and medium-sized enterprises (SMEs) banking. The company offers various commodity finance products to streamline business finance planning and operations.
The company provides various financial services, including exchange control and advisory services, import and export facilitation, structured trade finance deals, swift and international communications, correspondent banking relationships, and international trade finance services.
The Insurance Operations segment comprises ZB Hospital Cash Plan and ZB Re-insurance, which offers a diverse range of re-insurance services.
On the other hand, Mashonaland Holdings is a property sector-oriented company listed on the Zimbabwe Stock Exchange, engaged in property investment and development.
The company focuses on the delivery and investment management of commercial, industrial, retail, specialized, and residential properties, operating through four segments: Office, Industrial, Pure Retail, and Other.
With this controlling interest, ZB Financial Holdings ensures the company’s continued listing on the Zimbabwe Stock Exchange, while preserving the existing governance framework of Mashonaland Holdings.
Also read Zimbabwe: Acquisitions Create New Giant Food Retailer in Southern Africa
