Did you know? ZB Financial Holdings: The journey thus far

12 Jul, 2019 - 00:07 0 Views
Did you know? ZB Financial Holdings: The journey thus far

eBusiness Weekly

Fradreck Gorwe
Zimbabwe Stock Exchange-listed diversified financial services concern, ZB Financial Holdings Limited (ZBFH), has actual roots dating back to 1888 when the Dutch Bank for South Africa, was founded in Amsterdam. The bank opened an office in London in 1906.

Actual banking operations commenced in 1951 following a split that ushered in the renaming of the South African wing to Netherlands Bank of South Africa Limited. Operations were then acquired by Netherlands Bank of Rhodesia in 1967.

Since then, names changed in succession; Rhodesia Banking Corporation (1972), Rhobank (1979) and Zimbabwe Banking Corporation (Zimbank) in 1981 after the Government acquired Nedbank’s 62 percent of Rhobank when the bank withdrew from the country.

Possibly motivated by the desire to sustain the banking sector, during the same year (1981) the government acquired 49 percent stake in the Bank of Credit and Commerce Zimbabwe (BCCZ), which eventually became the Commercial Bank of Zimbabwe (CBZ).

In 1989, a restructuring exercise was done with the objective of bringing all subsidiaries and associates under one investment and holding company, Zimbabwe Financial Holdings Limited (FINHOLD).

Zimbank became subsidiary to FINHOLD in 1992 following the restructuring that separated non-banking activities from core-business.

By then, most entrepreneurs opted for non-banking financial institutions with less capital requirements. This became an entry route into commercial banking for some reputed banks thriving today.

Acquisitions over the years meant diversity of services from commercial and merchant banking, hire purchase and leasing as well as trust and executor services, and other services that were impossible with the forgone Banking Act. Diversification actually owed a lot from de-regulation and liberalisation of the banking sector when the Banking Act (24:01) came into effect in September of 1999. Barriers to entry were driven into oblivion. Some achievements for diversity include the merger with Sybank (1996), formation of Syfrets Asset Management (2004), acquisition of 32 percent stake in Cell Insurance (2007) and formation of ZB Securities (2008).

Zimbabwe Banking Corporation (Zimbank) was renamed ZB Bank Limited in 2006. Accordingly, FINHOLD changed into ZB Financial Holdings. During the same year the bank merged with Intermarket Holdings Units (IHL), among them Intermarket Bank, Intermarket Building Society (now ZB Building Society), Intermarket Reinsurance (now ZB Reinsurance), Intermarket Life (now ZB Life), and Intermarket Bank Zambia.

Prior to the acquisition Intermarket Building Society had failed to repay the liquidity support extended to it by RBZ under the Troubled Banks Fund. The debt was altered into equity which ZBHL eventually bought. The development, however, was met with objections by some IHL shareholders. Coupled with smart sanctions through 2017, this weighed heavily on the financial institution and some issues are yet to be resolved.

However, positives in financial performance were recorded with net revenue having gone 20 percent up from $69 million in 2017 to $83,5 million in 2018.

Corporate structure is currently constituted by Banking operations, Insurance operations and Strategic investments.

Ronald Mutandagayi is the current chief executive officer (CEO) of the financial institution, which trades on ZSE with a share price of $0,55 and market capitalisation of $96 354 853 as at 9 July 2019.

Meanwhile the Group has declared a dividend of $1,57 payable to shareholders at the close of business on 19 July 2019.

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