Tsitsi Ndabambi
THE National Social Security Authority (NSSA)’s 37,79 percent stake in ZB Bank which is on the market has attracted international financial institutions from oil rich nations .
The social security is desposing of its stake as a way of raising the much needed capital to complete some of the investment projects which have been lying idle owing to unavailability of funding.
This desire to unlock various projects has seen NSSA also considering offshore bids.
NSSA shares are believed to be worth more than US$ 12 million dollars, according to the shareprice of the entity.
NSSA Acting General Manager Mr Arthur Manase confirmed the authority was disposing of its entire stake in ZB, “as part of our banking sector restructuring exercise.”
Manase confirmed that more three bids have been received so far without disclosing the names of bidders.
“We are in the process of finalising the due diligence and going through the necessary governance approval processes,” he said.
But Mr Manase declined to comment on the issue of agents.
“This is in the interest of evaluating the transaction based on merit. As things stand, Nssa is not aware of the parties that are represented by the respective agents,”he said.
Sources close to the transaction said foreign financial institutions are bidding to takeover a major state in ZBH.
“The ZBH stake has generated a lot of interest from large financial institutions in Dubai and Singapore. NSSA is looking for the much needed foreign currency to unlock projects meant to enhance the well-being of the people. As such there seem to be appetite from NSSA to consider the offshore bids for the stake,” said the source.
Dubai’s bank asset size is over US$ 300 billion and the financial institution from Dubai eyeing a stake in ZB has an asset size of over US$ 50 billion. Singapore’s bank asset size is over US$ 200 billion.
The bilateral relations between Zim and UAE have been improving lately. UAE came to Zimbabwe’s rescue with COVID 19 PPEs and also for Cyclone Idai.
As at June 26, 2020, the ZB share was trading at about ZW$11,35 on the bourse.
The RBZ in its Monetary Policy Statement in February this year indexed minimum capital requirements of banks to US dollar equivalents such that banks classified as Tier-2 (commercial banks, merchant banks, building societies, development banks, finance and discount houses) are required to have capital equivalent to US$20 million. Tier- 1 banks, which are large indigenous commercial institutions, as well as all foreign banks, are required to have the equivalent of US$30 million by December 2020.
“Using the latest December 2019 capital positions and the current exchange rate, Nssa will be expected to provide additional capital of at least US$3,6 million or ZW$2,05 billion across the banking sector investee companies,” Mr Manase said
Nssa oversees the national pension scheme, has 66 528 608 shares in ZB and is disposing of its entire stake in the financial institution.
The local economy is expected to rebound buoyed by the increase in mining and agricultural sectors.
One commentator said that these financial institutions interested in the local banking sector because they believe the Zimbabwean economy will open soon.
They believe that Zimbabwe’s economy will be worth over US$100 billion in the next 10 years.
