Malawi Stock Exchange (MSE)listed FMB has said it sees potential for growth in the Zimbabwe market which is fast becoming a booming cross-border trade area.
The country is recovering from its worst economic crisis in a decade.
Presently, FMB holds a 70 percent shareholding in Capital Bank Limited in Mozambique, a 38.60 percent shareholding in Capital Bank Limited in Botswana and 49 percent in First Capital Bank Limited in Zambia.
Speaking in an exclusive interview with Business News on the recent acquisition of Zimbabwe’s Barclays Bank on Monday, FMB group managing director Dheeraj Dikshit said it has been the group’s dream to diversify to Southern Africa.
“Strategically, this was a very important acquisition because it gives us presence in the fifth most crucial market in this region.
“From our experience during the acquisition process, we saw that that there is a lot of cross-border traders in between Zimbabwe and Zambia hence to have a common bank which makes banking business simpler for our customers,” said Dikshit.
He said Zimbabwe also has a strong economic potential as there is possibility for a spine which happens in the banking sector as banks are closely linked with every country’s economy.
According to Dikshit, the bank will obtain 52 percent stake in Barclays but for the meantime the bank will acquire 42 percent and the remaining 10 percent in a three-year period.
“We have signed the share purchase agreement and now we have begun the process of seeking approvals from regulators both in Malawi and Zimbabwe which takes about three months, but also to ensure stability and continuity of the bank, Barclays and FMB have agreed to dispose the shares in phases, first the 42 percent and the remaining 10 percent later,” he said.
FMB chairperson Hitesh Anadkat is quoted by Zimbabwe media to have said that the bank is convinced that this acquisition, which is subject to completion of satisfactory due diligence and regulatory approvals, will translate into sustainable value for all stakeholders.
FMB which has been trading on the MSE since 2006 has 2.3 billion shares on issue on the local bourse.
But in the period ending December 31 the bank posted a net profit after tax of K5.184 billion was 32 percent up on the figure for 2015 largely due to considerably stronger returns by both interest and non-interest activities.
Barclays Bank of Zimbabwe is one of two banks together with Barclays Bank Egypt that do not form part of the lender’s South Africa-based Barclays Africa Group, which is also up for sale. n