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Zimbabwe revels in bank’s acquisition

WHEN two Englishmen meet, their first talk is of the weather. They are in haste to tell each other what each must already know; that it is hot or cold, bright or cloudy, windy or calm, 18th century writer, Samuel Johnson once said.


When a British-American banker extraordinaire Bob Diamond, Africa’s youngest billionaire Ashish Thakkar and Zimbabwean banker-entrepreneur Douglas Munatsi met last week, their common denominator was the ABC of sub-Saharan banking.

Forgotten Zimbabwe was thrust in the global limelight last week after an investment company backed by Diamond, the former Barclays Bank Plc chief executive officer, announced plans to buy a controlling shareholding in ABC Holdings in a deal worth US$265 million.

ABC Holdings has banking operations in Zimbabwe, Botswana, Zambia, Mozambique and Tanzania under the BancABC brand.

Diamond and his partner in Atlas Mara Co-Nvest Limited, Thakkar raised US$325 million when the company listed on the London Stock Exchange last year.

Atlas Mara’s intended acquisition of a controlling shareholding in BancABC is its first acquisition on the continent as it lays a solid base for future similar deals.

The transaction involves Atlas Mara buying 50,1% from selected shareholders in cash or swap, buying a controlling shareholding in Africa Development Corporation (ADC) and buying out minority shareholders representing 12%.

ADC has a 37% stake shareholding in BancABC.

Munatsi, BancABC chief executive said the transaction — the biggest in the financial sector so far — will help its subsidiaries attain between 5% to 10% market share in various markets they are operating in.

“In Zimbabwe and Botswana, we have 10% market share, in Mozambique we are just about 4% and Zambia as well. In Tanzania we are way below.”

Munatsi said they had built BancABC from the bottom and knows “what it is to work with limited capital. If you don’t have a big shareholder, you are on your own and we have been able to do that.”

Munatsi said capital was a key ingredient for growth and the company could either grow organically or through mergers.

“The reality is that unless you have got robust access to capital, your growth will be standard, limited or at some point it will pronounce your end,” he said.

Diamond said African banks needed capital, liquidity and funding and his company was coming to close that gap.

He said Atlas Mara’s vision was to see BancABC being “the leading financial services organisation on the continent”.

Thakkar said innovation would be the driving force behind BancABC’s growth. He said banking institutions should take the lead in mobile money. In the current scenario mobile operators are in charge and invite banks to be partners.

Finance minister Patrick Chinamasa said the investment by Atlas Mara would send a signal that Zimbabwe was ready for business. He said Zimbabwe would adjust the rules to ensure that investors were happy.
“We welcome FDI [foreign direct investment]. If there are challenges in our operating environment, we will sit down and talk.”

Analysts say the BancABC deal is a signal to investors that Zimbabwe was ready for business. It comes at a time the country has been struggling to attract meaningful FDI with potential investors saying the environment was not conducive to do business.

“Zimbabwe has attracted the highest level in finance through Diamond and Thakkar has passion about investing on the continent. What is needed is for the country to polish its image and ensure that a transaction like this is replicated in all the sectors of the economy,” an investment banker said on Friday.

“If Zimbabwe could attract five more Bob Diamonds by the end of the year, it will be a great leap forward for the economy,” an investment banker said.

The banker said a host of factors such as the resumption of the interbank trading, the continued use of the multicurrency regime and the restructuring at the central bank among others, could have aggregated to lure the investors.

Atlas Mara sees the acquisition of BancABC as an entry into the resource-rich Sadc bloc with rising trade flows and strong Gross Domestic Product.

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