Taking Stock Kudzanai Sharara
This week I had a chance to interview the new CBZ Holdings chairman Marc Holtzman. This was probably one of the first interviews he has granted to the local media.
Five months into his job, he is probably now ready to share his vision for the group, the country’s biggest with an overall market share of approximately 23 percent.
In its last trading update for the 9 months to September 2019, CBZ had 221 300 bank accounts, 13 percent deposits market share and total assets worth $5,8 billion.
Historically, CBZ has been Government’s bank of choice, away from the Reserve Bank of Zimbabwe of course. Over the years, the bank has been very strategic to Zimbabwe and naturally getting the bulk of Government’s business.
Just to highlight one of the critical roles that CBZ Holdings plays, through its banking arm played in this economy, we can go back as far as 2001, when the country had long-running fuel problems. These came to an end after CBZ’s intervention. During those years, CBZ played a facilitatory role, to financially and technically operationalise oil supply agreements between Zimbabwe, Kuwait and Libya.
The bank’s managing director Dr Gideon Gono had to make several trips to Libya and Kuwait to negotiate fuel deals, eventually acting as the financial advisers to a deal, that saw Libyan Arab Foreign Bank providing $360 million (old Zimbabwe dollars) for fuel supplies to Zimbabwe.
Probably the other significant role played by CBZ is that it has provided the central bank with two of its governors, the incumbent Dr John Mangudya and before him Dr Gideon Gono.
But that was another era with the bank now transforming into another one following the coming in of a new major shareholder and new board chairman, Holtzman.
My first impression of him is that he is a family man. It’s important. Someone said you can’t expect a man who can’t manage his family affairs to manage an institution or a nation. After we exchanged greetings I asked him how he was finding Zimbabwe as a country.
I love it, he said, and quickly started talking about how he plans to bring the youngest for a visit. Holztman, from the little I have known him is a man who wants to show his approval of things through the involvement of his children. In Rwanda, where he is chairman of that country’s biggest bank, the Bank of Kigali (BK Group PLC), he bought 706 000 shares of the bank for his four minor children, in addition to his own.
When asked about the purchase, Holztman said:
“This is my expression of confidence in the bank’s recent strong performance, growth prospects and leadership.”
He hoped the purchase would encourage more Rwandan parents to consider investing in the stock market to secure their children’s future.
It is thus a seal of approval for him to be considering bringing his child (ren) for a visit to Zimbabwe, a country which because of its long struggles is making it hard for many to appreciate it for what it is — a haven.
From his falling in love with Zimbabwe as a country we talked about the country as an investment destination.
“To me it’s one of the greatest investment opportunities I have ever seen,” was his quick answer.
“I believe that this country has such a bright future, its why I decided to take on the honour of this challenge and that’s why I am so excited about the future of Zimbabwe.”
Now this is a man who, I assume, has seen better opportunities having worked in other countries that are seen as economic role models by many. Holtzman heads the BK Group PLC, Rwanda’s biggest banking group. This is the same Rwanda that many say we should emulate. This is the same Rwanda that the recently passed Zimbabwe Investment Development Agency (ZIDA) Act was fashioned from. If it were in showbiz, Rwanda would be seen as a poster boy on how to run an economy.
As a country we have liked so many things Rwanda is doing such that President Mnungagwa invited Rwanda Development Board (RDB) chief executive Claire Akamanzi to Zimbabwe to address Cabinet members, the private sector and civil servants on how Rwanda managed to attract huge Foreign Direct Investment within a short period of time.
This is the same Rwanda where Holtzman is chairman of the country’s biggest bank. Given what Rwanda has done and how it’s developing, there is no doubt the BK Group PLC is playing a critical role, just as much as CBZ does and is expected to do here in Zimbabwe.
Don’t they say banks are engines of the economy. The good thing is Holtzman is not apologetic about the bank’s close ties with Government. We want to do more he said, and just last year, mostly after his appointment, the bank extended $3 billion worth of loans to the agriculture sector, under Government’s Smart Agriculture Programme.
Looking at the BK Group PLC’s last performance numbers, one can see that its moving in tandem with the Rwandan economy. BK Group PLC, which as of September 2019 operates 79 outlets, enjoys nearly 33 percent of the total market share. Its consolidated assets were valued at Rwf761,3 billion (US$821 million) as of September 30, 2019.
According to the latest financial performance statistics from the bank, the bank has been generating about 20 percent per annum return on equity for the last five years. That’s an impressive return and one that Holtzman might bring to CBZ in real terms.
His vision is to transform CBZ and by extension the Zimbabwean economy. The quest to transform came with a massive restructuring exercise that has seen the bank part with 6 executives, to bring in fresh minds. Over the years, there have been calls that the country must leverage on its diaspora skills to be able to compete with the best in the world. Holtzman is doing exactly that and has brought in at least 4 skills from the diaspora.
Tawanda Gumbo, who spent 16 years as a senior executive for Deloitte and Touche’s operations in Southern Africa, West Africa, Central Africa; is coming back to become CBZ Holding’s chief finance officer. Another senior executive to run the group’s talent “retraining and retaining”, Nyasha Mutsai, was recruited from Standard Bank.
Two more came from Goldman Sachs and Renaissance Capital. Such talent is not easily attracted back home, but there is a story that Holtzman sold to them and they believed. It’s a lesson to other businesses, with a clear vision, you can attract the best talent.
Econet has been doing the same, bringing in talent to head some of its new innovations.
What all this points to is being able to identify opportunities and having the right skills to exploit them. There is obviously a gap in this economy and the banking sector in general, that could be exploited for good returns. CBZ itself is starting CBZ Capital, a unit Holtzman says is going to be the premier corporate finance investment banking institution.
In his parting words, Holtzman said anyone looking at investing in Zimbabwe they should “go long and invest generously in Zimbabwe Inc”.