THE proposed takeover of Standard Chartered Bank Zimbabwe (StanChart), the country’s oldest financial institution, has moved a gear up after five prospective investors including local and regional entities submitted their bids, the Zimbabwe Independent can reveal.
The London-headquartered bank announced on April 14 last year, that it would leave Angola, Cameroon, Gambia, Sierra Leone and Zimbabwe, as well as Jordan and Lebanon in the Middle East.
In Tanzania and Ivory Coast, the group announced that it would cut its business back to just the corporate, commercial and institutional banking (CCIB) functions.
The reason for the complete departure (and scaling back) from these markets, according to reports, was that StanChart made up only 1% of its total income for 2021.
Standard Bank chief executive Bill Winters in April last year said the financial institution was sharpening its focus on the most significant opportunities for growth while also simplifying its business.
StanChart’s departure ends a 130-year presence in Zimbabwe.
The development follows the 2017 Barclays Bank’s decision to pull out of markets, including Zimbabwe, in which it had operated for decades.
Meanwhile, the withdrawal, according to StanChart, was intended to refocus its resources in jurisdictions “where it can have the greatest scale and growth potential”. This saw the bank putting its Zimbabwean banking operations for sale.
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The Independent is reliably informed that five investors have since submitted their bids and the list will be whittled down to three before a determination is made.
Other sources close to the developments claimed that the number of bidders has since been reduced to three.
Zimbabwe’s biggest bank on the balance sheet CBZ Holdings and FBC Holdings are said to be among those that expressed interest while FNB of South Africa also reportedly expressed interest. Another South African bank Nedbank through its shareholder, Old Mutual Zimbabwe, is also reportedly eyeing a piece of the cake, according to sources.
A consortium representing Zimbabwean entrepreneurs (names supplied) is on the list of bidders.
In a brief response to inquiries from the Independent, ShanChart Zimbabwe spokesperson Lillian Hapanyengwi said the process to identify potential buyers is ongoing.
“The process to identify potential buyers is progressing well. We will update our stakeholders once the process is concluded,” she said.
However, a well-placed source told the Independent that the finalisation of the transaction could be delayed by the upcoming general elections but confirmed bids from the five bidders.
“Five investors submitted their bids and they will eventually be shortlisted to three before a winner is announced. Among the five is a combination of two regional banks, two local banks and then a consortium led by former Old Mutual executives,” the source said.
Old Mutual Zimbabwe chief executive Sam Matsekete said the group will always seek ways to serve its customers better and create mutual futures for all stakeholders
“Old Mutual Zimbabwe as a business is always seeking ways to serve our customers better and create mutual futures for all our stakeholders. This includes seeking the best investment opportunities in our local market.
“We are however currently not engaged in the negotiations you specifically refer to. Any relevant developments in the Old Mutual business are announced to stakeholders through the appropriate channels from time to time,” Matsekete said.
CBZ denied having submitted a bid.
“We have not tendered a bid for Stanchart,” the bank said.
Questions sent to FBC and Old Mutual were not responded to by the time of going for print.
The proposed exit by StanChart from Zimbabwe has caused economic earth tremors and thrown fiscal and monetary authorities off-balance as the shocking move signals the end of an era for correspondent banking.
The implications, according to market analysts, are overarching beyond job carnages and waning confidence in Zimbabwe’s systems. It has a ripple effect on the clearance of United States dollar (USD) transactions.
While there are other banks handling correspondent banking for US dollar transactions, Stanchart clears over 60% of forex payments.
Over the years, international banks have been “de-risking” correspondent banking relationships with local banks, posing a significant risk to efforts to access foreign lines of credit.
Last year, bankers complained about the impact of Western sanctions on Zimbabwe, which has led to the loss of more than 100 correspondent banking relationships since the restrictions were imposed at the turn of the century.
Zimbabwe Banks and Allied Workers Union (Zibawu) assistant secretary-general Shepherd Ngandu told the Independent there were meetings lined up to have a clear understanding of the current situation with regards to the takeover of Stanchart.
He said the trade union was also in the process of engaging critical stakeholders like the Reserve Bank of Zimbabwe (RBZ) and the Finance ministry to make sure the interests of the employees are protected.
“We have meetings that are lined up with the stakeholders. We were supposed to have a meeting today (Thursday) with the management of Stanchart. So far we don’t know the position that is there until we have that particular meeting.
“We are also going to meet the Finance ministry and the RBZ to make sure the interests of the employees are safeguarded. We are also looking if there are possibilities of having employee share ownership schemes. As a trade union we are fully seized with that particular matter,” Ngandu said.
This is not the first time that an international financial institution has exited the Zimbabwean market. As part of its decision to exit Africa, Barclays has agreed to sell its operations in Zimbabwe, ending the group’s 90-year presence in the country.
On June 2 2017, Barclays announced the sale of its outpost in Zimbabwe to Malawi-listed lender First Merchant Bank, a continuation of the bank’s exit from Africa.
The bank first announced its intention to sell its stake in Barclays Bank of Zimbabwe in March 2017, in keeping with its broader strategic decision to exit the continent entirely and refocus operations in the US and UK.
