CBZ says it’s not ending its ambitions to build a regional financial giant after competition regulators turned down its plans to take over First Mutual Limited, a transaction that was a key chess piece in its game plan.
The country’s biggest bank completed a deal to buy 31.22% of First Mutual Limited from NSSA last year, taking its shareholding to 36%. The transaction meant CBZ had to make an offer to buy shares from remaining FML shareholders. This would have seen CBZ taking a commanding share of FML, taking it a step closer to its ambitions to create a financial giant that it wants to use to underwrite large projects in Zimbabwe and the region, to compete with the likes of Old Mutual.
But the Competition and Tariff Commission stepped in, saying CBZ should stick to the 31.22%. The regulator is, shortly, due to make another ruling key to CBZ’s strategy; its planned takeover of ZB Bank.
Group CEO Lawrence Nyazema says this is just a bump on the road. The bank will look around for other acquisition targets, and it is now looking beyond the borders.
“We wanted to deepen our diversification by acquiring an insurance, property, and investment business and integrating them with our existing operations,” Nyazema says. “The merger is no longer an option, so we are exploring alternative ways to achieve our growth objectives. This includes looking for other partners. Our goal remains to grow our business, deepen our presence in Zimbabwe, and expand into international markets.”
CBZ, he adds, is still an influential shareholder in FML, alongside majority shareholder NSSA. The pension fund is the biggest shareholder in CBZ, with 23.3%.
The FML takeover would have helped CBZ enter the region faster, he says. But the company has opened an asset management office in Mauritius and another representative office in South Africa, looking to use that as a launchpad into the region.
“You will see us diversifying beyond Zimbabwe, and away from being solely a bank,” Nyazema says. “There are opportunities that are independent of FML in the region.”
Nyazema sees an opportunity to use Datvest, its asset manager, to lead the growth push in Zimbabwe and outside the country. At home, CBZ is looking at ways of tapping into the informal sector, which dominates the economy but remains underbanked. The bank is also expanding its investment in property to meet rising residential demand.
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