Barclays deal to boost FMB Botswana unit

HARARE – First Merchant Bank Limited (FMB)’s Botswana unit, Capital Bank, said the acquisition of Barclays Bank Zimbabwe (BBZ) will boost trade and investment in southern Africa.

This was after Barclays Plc last week announced it was selling 42,68 percent of its 67,68 percent shareholding in BBZ with an additional 15 percent of shares being earmarked for an employee trust and FMB receiving the right to purchase Barclays PLC’s remaining 10 percent interest at a future date.

FMB owns 38,6 percent of Capital Bank Botswana, giving it effective control of the growing commercial banking operation.

FMB’s group managing director, Dheeraj Dikshit, said the BBZ transaction represented a “profoundly important” milestone in the Malawi-headquartered bank’s strategy to become a leading regional bank.

“In 2008, in terms of that same strategy, we acquired control of Capital Bank Botswana, an investment which has translated into considerable, steady, growth since then, in terms of our physical presence, employment, profits and our offering to Botswanan customers,” he said.

The banker further indicated that in acquiring a respected but vibrant institution such as BBZ, the FMB group will accelerate its regional growth strategy by helping to foster customers’ cross-border trade and the expansion, by large and mid-sized corporates, of regional operations.

“In the process we are confident of facilitating new job-creating investment both in Botswana and across the region,” he said.

Dikshit said the strength of FMB’s leadership, its human capital, information technology and customer solutions and relationships were demonstrated by the bank’s latest financial results which showed that both Capital Bank Mozambique and FMB’s Zambian operations had achieved profitability after just three years of acquisition.

In the current financial year, Capital Bank Botswana delivered record profits, of P23,9 million.

In Malawi FMB Malawi offers retail and corporate services and also owns the Leasing and Finance Company which offers asset financing, mortgage loans and leasing schemes.

FMB owns 70 percent of Capital Bank Limited Mozambique and has effective control of Capital Bank Botswana and First Capital Bank Zambia.

At its latest financial year end the group had total capital of $74 million and total assets of $452 million.

BBZ had total capital of $65 million and total assets of $470 million. In 2016/17 the FMB group recorded $12,8 million net profit after tax and BBZ a net profit after tax of $10,4 million.

Dikshit said the British lender and FMB had agreed on a three-year transition plan which will facilitate a systematic migration from Barclays’ operating platforms to those of FMB and that, during this period, both banks will deploy considerable resources to ensure a smooth transition.

He added that he believed a key consideration for Barclays was the strength of FMB’s information technology platforms, in which it has made a substantial investment over the past three years.

“Capital Bank Botswana is today thoroughly integrated into our IT systems and it will be one of FMB management’s key priorities in the months ahead to work with Barclays Zimbabwe on bringing the same benefits that Capital Bank and others have enjoyed, from our technology platforms, to Zimbabwe.

Based on our experiences in Botswana, Mozambique, Zambia and Malawi I have no doubt that we will achieve this objective,” he said.

Capital Bank chief executive Jaco Viljoen said Botswana customers stand to benefit the most from the latest acquisition.

“Our Botswana clients want seamless, affordable solutions for trade and investment across our shared border,” Viljoen added.

“They want a dynamic, responsive bank that has real resources and skills in both Botswana and Zimbabwe. Soon, through our shared FMB network, Capital Bank will have the best banking expertise, information technology and services in both countries.”

Barclays Plc’s sale of its shareholding in BBZ is subject to regulatory approvals but is expected to be concluded by the end of September this year.

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