NSSA banks merger plan ripens

HARARE - A Deloitte & Touche study on the National Social Security Authority (Nssa)’s banks merger plan is expected next Tuesday, officials have said.

While the pensions fund’s acting general manager Tendai Mafunda has confirmed the development, Nssa commissioned the study to explore the feasibility of consolidating its banking assets, which include stakes in Capital Bank Corporation, John Mushayavanhu’s FBC Holdings Limited (FBCH) and others.

“We have commissioned experts to study the feasibility of our plan to merge the banks we have interests in. We expect it (study) to be done by mid-January,” Mafunda told businessdaily.

Nssa’s plan to merge the banks it has interests in, comes on the back of the Reserve Bank of Zimbabwe (RBZ) imposing new capital thresholds for commercial and merchant banks.

The institutions are required to have a minimum capital of $100 million by June 2014, to be implemented in a phased approach.

In the first phase, the banks were supposed to have a minimum capital of $25 million by December 31, 2012, then increase to $50 million by June 30, 2013 and $75 million by December this year.

Mafunda said the probe’s results will be deliberated on by Nssa’s board before a decision whether to merge the banks or not is made.

The pensions administrator’s shareholdings in the financial institutions include 26 percent in FBCH — the owner of FBC Bank, 40 percent in FBC Building Society, 37,9 percent in ZB Financial Holdings — the parent company of ZB Bank Limited and 84 percent in Capital Bank Corporation.

It also holds an 11,6 percent stake in CBZ Holdings, the proprietors of CBZ Bank Limited.

On a pro rata basis, Nssa would fork out more than a $100 million on its part in meeting the RBZ new capital thresholds.

Ranga Makwata, an independent investment analyst said while joining banks might seem a noble idea, clients might think otherwise.

“The problem with banking is that joining different banks with different client base might not yield the desired results.

“Banks don’t look attractive because they have merged. In the financial services sector confidence is key,” Makwata said, adding that brand equity takes centre stage with most customers.

However, he said Nssa’s strategy to invest in different banks helps keep public funds safe. - Eric Chiriga, Business Editor

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