SOUTH Africa’s First National Bank is shopping for a solid indigenous bank but analysts say the country’s indigenisation legislation might put a damper on the financial institution’s plans.
Banking sector sources said First Rand, FNB’s parent company officials were in Harare last week to identify opportunities in the country’s financial services sector.
According to the sources the executives held “tentative” meetings with various indigenous financial institutions where the banking group indicated it would be interested in having at least a 51% stake in a solid bank.
Sources say FNB was likely going to acquire one of the local banks and push for the presence of its brand in Zimbabwe.
“I understand they were just looking for business opportunities, meaning they were open minded in their approach. They were scouting for banks in which to buy shares as well as scope to set up their own,” said a source this week.
“From previous interactions with them, they like stakes in which they control and extend their own brands, meaning they would want an institution where they convert it to FNB, which generally means they want 50% or more. I am not sure if they have changed that approach for now.”
“They had preliminary talks with a number of institutions,” added the source.
Another source said the major hurdle that could face the bank was getting a controlling stake in light of an empowerment law that demands foreign investors have to shed at least 51% in any business.
But indigenisation Minister Saviour Kasukuwere allayed fears of wholesale takeovers saying the empowerment policy would be “carefully” implemented while other sources believe that the financial services sector of the economy was not keen on indigenisation because the majority of financial entities are owned and run by indigenous Zimbabweans.
Analysts say FNB could target indigenous banks which are relatively cheaper in other economies.
CBZ, capitalised to the tune of US$67 million, this week was the largest indigenous bank by capitalisation while CFX and FBCH at around US$6 million were the smaller banks listed on the Zimbabwe Stock Exchange.
FNB was part of a visiting South African business delegation that expressed investment interest in Zimbabwe in April pending the signing of bilateral investment agreement. —— Staff Writer.