Malawi bank eyes Barclays Zim

HARARE - Malawi's FMB Capital Holdings (FMB Capital) is in exclusive talks with Barclays Plc to buy its 68 percent stake in Barclays Bank Zimbabwe (BBZ).

This also comes as sources have told businessdaily that a local consortium — led by an Indian family with ties to President Robert Mugabe’s government — was also playing a key role in the proposed transaction by the Mauritian-backed financial institution.

While a spokeswoman for the British-based holding company of George Guvamatanga’s bank has confirmed that Barclays Plc was in early discussions with a prospective buyer for its Zimbabwean unit, a spokesman for the local unit Kevin Khumalo referred further questions to the London head-office.

“We can’t comment on that one. You have to speak to Barclays London . . . ,” he said in a telephone interview yesterday.

However, the ex-First Merchant Bank — which was renamed to FMB Capital after a registration transfer to Mauritius —said in a cautionary to the Malawi Stock Exchange yesterday that it was angling for a stake in BBZ, which has a market capitalisation of $60 million.

“Discussions with Barclays Plc are ongoing . . . such transaction would also be subject to obtaining approval of the banking regulators in Malawi and Zimbabwe,” company secretary Oswald Mtokale said.

Listed on the Blantyre Stock Exchange in 2006, FMB Capital was registered as a commercial bank in 2010 with wholly-owned subsidiaries, in leasing finance and portfolio management outfit known as FMB Capital Markets.

The bank also holds a 70 percent shareholding in Capital Bank Limited, a licensed commercial bank incorporated in Mozambique, a 38,60 percent shareholding in Botswana’s Capital Bank and a 49 percent stake in Zambia’s First Capital Bank.

According to analysts, the frenzy for BBZ comes after a number of local and foreign investors, including groups led by one of the country’s largest institutional investors, had expressed interest in the listed asset following an announcement by Jes Staley of his bank’s intention to exit the Zimbabwean market, as part of a continent-wide divesture to focus on its core British and American zones.

As it is, the United Kingdom-based financial behemoth’s African assets, which include a 62,3 percent in Barclays Africa (formerly ABSA) and spread across 11 countries, are also up for sale with South Africa’s Public Investment Corporation leading the race to acquire the on-sale subsidiaries.

However, a bid to sell the Zimbabwean and Egyptian banks to the South African-domiciled regional head-office failed in 2015 after the parties could not agree on a price.

While Barclays plc holds a near 70 percent stake in Guvamatanga’s BBZ, the remaining 30 percent is what is mainly traded on the Zimbabwe stock exchange.

The local bank, meanwhile, employs up to 1 022 workers and operates from 38-plus branches nationwide, and its management recently said “it is preparing for life without its parent”.

“We believe we have created the platforms to have a sustainable and scalable business, which at the end of the day is all about our customers and our people,” the group’s managing director said at the company’s analysts briefing.

“The relationship we have created with our customers and the capacity of our people since 2009 gives us very strong comfort that we will be able to continue to support our customers through a very seamless transition from Barclays Bank Plc when the divesture eventually does happen,” Guvamatanga said.

“We are looking forward to a very strong future — another 104 years where we can and will continue to support our customers,” he added.

In its full year to December 2016, BBZ grew its total income by 27 percent to $58,3 million and boosted by increases in net interest income, and non-funded income.

While profit after tax increased by 177 percent from $3,9 million to $10,8 million after the bank reduced its impairment losses, it is also understood that the family that is driving the local institution’s acquisition has had a prior interest in the banking sector and currently has interests in the fuel sector.

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