CBZ Seeks Nod To Merge Units…As Insurance Unit Consolidation Begins

ZIMBABWE’s largest banking group is set to merge its major units as it seeks to unlock shareholder value.

CBZ Holdings Limited (CBZHL) will merge its flagship commercial banking unit, CBZ Bank Limited and CBZ Building Society, according to a statement issued by the Reserve Bank of Zimbabwe (RBZ), which said the financial institution has asked Finance Minister Mthuli Ncube for approval.

The proposed transaction comes as CBZ seeks to create a multi-asset national and regional business in the financial services industry.

“It is hereby notified under section 25(4) of the Banking Act that CBZ Bank Limited and CBZ Building Society, both incorporated under the laws of Zimbabwe and carrying on banking business, have requested the Minister of Finance and Economic Development…for his approval of the merger of CBZ Bank Limited and CBZ Building Society,” read the statement released by RBZ.

The central bank said that in order to facilitate the transaction, the two institutions offered to combine under a single entity, CBZ Bank Limited.

After the merger, CBZ Building Society will cease to exist as an entity and give CBZ Holdings a combined investment value of over $1 billion.

“The memorandum of understanding under which the merger is to be effected will be open for inspection by members of the public for a period of 21 days from the date of publication of this notice in the Official newspaper“, said the RBZ.

The merger completes a process that began in 2010 when the group launched an operational integration process between the bank and the construction company, which has enabled the former to offer a one-stop shop for its customers.

This meant that the group offered banking and property finance products and services under one roof.

Operationally, this consolidation also meant that the branches of the CBZ Building Society had been integrated into the commercial bank.

The services offered by the construction company are now offered in CBZ branches, which allows the group and its customers to save money.

There have been several consolidations at CBZ Holdings over the past year.

In November, the National Social Security Authority (Nssa) consolidated its stake in the financial services powerhouse, while stepping up its longstanding ambition to pounce on the most viable stocks in the blue chip league.

Following an agreement in which more than 60 million US dollars were exchanged, Nssa increased its stake in the group to between 27% and 28%, becoming the main shareholder.

Previously, the state-run mandatory pension fund held an 18% stake in the company.

Nssa, in turn, sold 31.22% of its stake in publicly listed financial services giant, First Mutual Holdings Limited (FML) to CBZH, which reportedly paid for part of the deal in hard currency.

The deal saw Nssa overtake a candidate called Akribos, who had become CBZH’s largest shareholder following a surprise deal in 2020, which left the vehicle controlling the largest stake, followed by the government with 21.07% and of the Libyan Foreign Bank.

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