MBCA dabbles in shaky retail banking

Shakeman Mugari

NICHE banker MBCA Bank Ltd on Wednesday opened its first branch in Harare, confirming its status as the country’s 17th commercial banking licence holder.



face=”Verdana, Arial, Helvetica, sans-serif”>The MBCA Holdings subsidiary was born out of the four decades-old merchant banker’s conversion of its licence into a commercial one and following on three distinct and similar actions by Kingdom Financial Holdings, NMB Bank Ltd and benighted Trust Bank Corporation Ltd in recent years.


Asked about the rationale of going into commercial banking now when the financial sub-sector is swamped in trouble, Denys Denya, the bank’s interim managing director, said the rollout plan was anchored in corporate company clients banking, as opposed to the troubled mass market.


MBCA Bank would initially target and utilise its strong corporate client base, the merchant banker said.


“We already have a client base in the form of our corporate clients from the merchant bank portfolio. So we are now offering a commercial bank service to them and I think that’s what they need — a one-stop shop — in terms of their banking needs,” Denya said.


While the current merchant or corporate class would sustain the bank, MBCA would then go for full development of a high-income portfolio or clientele thus fulfilling its niche strategy.


“Then we are going to target a niche market. We believe that is where our expertise lies. We would not want to venture into totally new areas in which we don’t have the experience,” he told businessdigest this week.


Such a thrust was also peculiar to NMB Bank, founded by the self-exiled quartet of Julius Makoni, James Mushore, Otto Chekeche and Francis Zimuto, and which bank former MBCA boss David Hatendi now leads.


There has also been persistent merger reports between the two institutions.

MBCA Bank, Denya said, would roll out three more branches within the next two years in Bulawayo, Gweru and Mutare, although he could not disclose the costs involved.


Another objective of going into commercial banking was to access cheap financing, which would grow the group’s earnings, he said.


Four external investors own MBCA Holdings which include three banks, and an investment company. The four offshore owners are South African-based major shareholder Nedcor Bank Ltd, Mediobanca-Banco Credito Finanziaria of Italy and Anglo Jewish family-owned NM Rothschild and Sons Ltd as well as Societé Financiere pour d’Outre Mer of France.


MBCA employees also have a stake through a share trust. Old Mutual Zimbabwe concludes the list of local shareholders.


Four of the country’s 16 erstwhile operating commercial banks have failed due to liquidity problems. These include Barbican, Royal, Time and Trust all of which are locally owned.


Those placed under curatorships, along other failing financial institutions have been earmarked for collation into central bank boss Gideon Gono’s planned Zimbabwe Allied Banking Group — to be jointly owned by the government, creditors and depositors of the distressed financial institutions.

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