Barclays Zimbabwe chairman Anthony Mandiwanza
BRITISH lender Barclays Plc last week concluded the disposal of its Zimbabwean unit to Malawi’s FMB Capital Holdings (FMBCH) after it was given the greenlight by regulatory authorities to sell 81 percent of its shares in Afcarme, the majority shareholder of Barclays Bank Zimbabwe (BBZ). Barclays Plc will retain 19 percent shareholding in Afcarme for a period of up to three years, giving FMBCH an effective 42,7 percent shareholding in BBZ, with Barclays Plc retaining an effective 10 percent ownership. The first phase of the transaction involved the transfer of Barclays’ 15 percent shareholding in BBZ to an employee share ownership scheme. The Financial Gazette’s Markets Editor John Kachembere (JK) caught up with BBZ chairman Anthony Mandiwanza (AM) to discuss the transaction, which courted controversy with activists calling for the deal to be cancelled alleging it had breached indigenisation regulations. Below are excerpts of the interview.
JK: Barclays Plc on October 10 concluded the sale of its Zimbabwe unit to FMBCH. What does this development mean for Barclays Bank of Zimbabwe (BBZ)?
AM: FMBCH, BBZ and Barclays Bank Plc will be working jointly over an agreed period to ensure a smooth and seamless transition. BBZ is a well-established business in its local territory and will continue to be managed in a professional manner with strong governance as all stakeholders have come to expect from such a business. FMBCH is committed to ensuring that its customers across the group, including Zimbabwe, are provided excellent levels of service. FMBCH will continue to pursue its conservative approach to banking with BBZ but will also seek to enhance the product and service offering by leveraging on BBZ’s existing infrastructure and skills as well as FMBCH’s regional expertise.
JK: Will the core management team at BBZ remain in place following the conclusion of the transaction?
AM: The new shareholder will be working closely with BBZ management to ensure a smooth transition. Barclays Bank of Zimbabwe Limited is demonstrably sound and an attractive business with strong long term potential. Indeed the core management team will continue to provide the management leadership of the business as it positions itself to create sustainable value for all shareholders of the bank.
JK: As chairman of BBZ, you have been very instrumental in this deal. How do you feel concerning the success of the transaction?
AM: Barclays Bank Zimbabwe’s strong customer and client relationships and highly professional team mean we believe that this business, as part of FMBCH, will have a greater opportunity to grow and thrive. With a growing regional presence, commitment to customer service and a highly professional team, FMBCH is ideally positioned to assume control of BBZ and grow the business.
JK: There have also been allegations that you influenced your board to accept FMBCH bid ahead of other bids in order to enhance Dairibord Malawi’s standing with FMBCH. What is your comment on this?
AM: We cannot comment on spurious allegations, suffice to say Dairibord Malawi has never banked with FMB or FMBCH, neither has it ever done business of whatever form with the former. The FMBCH bid was never accepted by the board of BBZ as this was a shareholder transaction between Barclays Plc and FMBCH at the level of Afcarme.
JK: Politicians and local pressure groups have accused Barclays, the Reserve Bank of Zimbabwe and the Ministry of Finance of flouting indigenisation regulations by allowing FMBCH to acquire BBZ. What is your comment on these allegations?
AM: The sale of Barclays Bank Plc’s majority shareholding in Afcarme Zimbabwe Holdings (Pvt) Limited, the holding company of Barclays Bank of Zimbabwe, to FMBCH has successfully met all regulatory and statutory requirements as previously communicated. We cannot answer on behalf of the Reserve Bank of Zimbabwe or the Ministry of Finance.
JK: How will the impending appointment of Hitesh Anadkat and Dheeraj Dikshit to the BBZ board affect the structure of the board as well as operations of the financial institution in Zimbabwe?
AM: As per (the) abridged circular to shareholders published today, 13 October, 2017, the proposed board appointments are subject to approval by the Reserve Bank of Zimbabwe and will be put to shareholders for ratification at the next annual general meeting of shareholders. We believe their combined experience as articulated in our circular to the market will strengthen the board. The board of BBZ will continue to direct and control the bank in line with standard norms and dictates of good corporate governance and complete fulfilment of the Reserve Bank Act.
JK: What else would you want to say to various BBZ stakeholders?
AM: Barclays Bank of Zimbabwe Limited remains a strong and solid banking institution whose future looks bright.
BARCLAYS OF ZIMBABWE FACTBOX
1912: Opened first branch after Bank of Africa was acquired by National Bank of South Africa and effectively became Barclays Bank, controlled from South Africa.
1928: As the business grew, the first Barclays Committee was established, responsible for local controls, based in Bulawayo. Ten branches were opened by that time.
1956: Barclays was the first bank to introduce computers, making banking service delivery increasingly efficient. During that time, Barclays was implementing a comprehensive training programme running between 1951-1958.
1960: Barclays was the first to introduce the first night safe and safe deposit facility featured on its newly established 8-storey head office in Harare built out of diamante sandstone on a black granite plinth and designed by Francis Lorne.
1987: The first country branch was established in Gokwe, officially opened by the then Deputy Prime Minister Simon Muzenda, who praised Barclays for heeding the government’s call to bring banking to rural people.
1991: Barclays was the first financial institution to offer 30 percent of its shares to the public in an effort to encourage Zimbabweans to become first time investors. The issue was oversubscribed five-fold and caused a record rise in stock market prices.
1993: Barclays was one of the only two banks to have installed ATMs to improve service delivery and by 1993 Barclays had 50 ATMs.
2008-2012: Barclays rationalised its support structures and foot print in line with business levels obtaining which resulted in reduction in fulltime employees from a peak of 1 423 in January 2008 to around 700 currently.
2016: Barclays Plc announced it was disposing of its African assets, including in Zimbabwe, to focus on British and American markets. Barclays Bank Zimbabwe, alongside the Egyptian business, was not part of the 2013 deal that saw Barclays Africa, formerly ABSA, acquire eight African operations from its parent company due to high local political risk. A number of bidders began scrambling to acquire one of Zimbabwe’s iconic financial institutions.
2017: FMB Capital Holdings (FMBCH) of Malawi emerged as the winner in March.
The deal was sealed on October 10, after all regulatory approvals were secured, resulting in FMBCH acquiring a 42 percent shareholding in Barclays Bank Zimbabwe with Barclays Plc retaining a 10 percent stake — employees hold 15 percent through an Employee Share Ownership Trust and the remaining 33 percent are listed on the Zimbabwe Stock Exchange.
“The completion of this transaction marks an important juncture in the history of Barclays Bank Zimbabwe. It is testament to the successful franchise that the institution has become, particularly since dollarisation and in the current challenging macroeconomic environment, as evidenced by our 2017 half year results,” Barclays Bank Zimbabwe board Chairman, Anthony Mandiwanza said, announcing the transaction.