The Herald (Harare)

Zimbabwe: ZB to Dispose of Two Units

ZB Financial Holdings intends to sell its asset management and stockbroking units to focus on core business areas of banking and insurance, a company official has said.Spokesperson Ms Estar Toto last week said the transactions will be completed by end of next month.

"In line with its intention to focus on its core business areas of universal banking and universal insurance as announced at the ZB Financial Holdings Limited media and analysts briefing held on March 24, 2014, the ZBFH Board has approved the disposal or voluntary winding up of ZB Asset Management Company Limited and ZB Securities.

"It is anticipated that the transaction will be concluded by June 30 2014," said Ms Toto.

Employees in the two units will be deployed to other divisions while an investment division will be re-opened.

ZB operates a commercial bank, a building society, insurance business, reinsurance, life business and share transfer unit. Ms Toto, however, said the group is proceeding with the merger of its commercial bank ZB Bank Limited and ZB Building Society.

"ZBFH is confident that once completed, these measures will lead to a leaner, more focused and profitable enterprise," said Ms Toto, adding that the group's performance is currently below that of the comparable period for last year.

Analysts said subdued activity on the Zimbabwe Stock Exchange has put viability of many stockbrokers under threat as only few players are handling the bulk of the transactions.

Stockbrokers derive their revenue from a 1 percent charge on the buy and sell side. Analysts said only a few stockbrokers with international connections were getting "meaningful" business while most of the players were struggling to make reasonable transactions.

Last year ZSE chief executive Mr Alban Chirume described the situation as "a matter of great concern."

He said the planned automation of the trading would reduce the cost of doing business.

"This will come through reduction of transaction costs and reduction in redundancy systems," he said.

"From experience from other countries that have automated, volumes of trading more than triple when the stock exchange automates."

Mr Chirume said the ZSE would work closely with stockbrokers, asset managers and other stakeholders to increase the attractiveness of capital markets to local and international investors.

Most asset management companies are also facing challenges due to prevailing liquidity constraints while fears of the Zim dollar return have deterred investments on the money market. These fears have since been allayed.

There are 15 registered asset management companies but only a few, particularly Imara, ABC, Datvest and AfrAsia are enjoying "good business," source said.

Ads by Google

Copyright © 2014 The Herald. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.