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Jewel to diversify from banking

Roadwin Chirara

THE Jewel Bank is seeking shareholders’ approval to set up a holding company, CBZ Holdings, to allow it to diversify from its core banking business.

“Verdana, Arial, Helvetica, sans-serif”>Speculation has been rife this week in the financial services sector that the move was necessitated by a need for the financial institution to account for its controlling stake in telecoms company, TeleAccess Zimbabwe.

The Jewel Bank took up a shareholding in TeleAccess after it turned its $150 billion debt into equity.

The debt conversion is said to have been agreed to by TeleAccess after it failed to service its long overdue line of credit from the financial institution.

The ceding of the telecom shares to the bank has resulted in the Jewel Bank becoming TeleAccess’ majority shareholder with an undisputed 57% controlling stake in the company.

The bank’s interest in the telecom venture is said to have mainly aimed at protecting its funds, which had been tied up with no chance of repayment from the company.

However, Jewel Bank managing director and group chief executive officer, Nyasha Makuvise denied that the financial institution ever took a stake in TeleAccess.

He refuted reports that the bank had converted its $150 billion debt owed by TeleAccess into equity.

“Who said we ever bought into TeleAccess? The only relationship we have with the company is a customer relationship, we have dealt with them as our customer,” said Makuvise. On the proposed holding company, Makuvise said the move had been necessitated by future plans of the institution.

“What we are doing is necessary. I really don’t see where the problem is with what is being done. We have been operating under a particular name and a name change has become necessary,” said Makuvise.

The proposed change of name to a holding company will also see the bank trading as CBZ Bank from the Commercial Bank of Zimbabwe.

The financial institution also aims to transfer shares trading on the Zimbabwe Stock Exchange to the proposed holding company on approval of the company’s shareholders at its annual general meeting.

The bank’s fate lies with its controlling shareholders who include Absa of South Africa with a 25,7% stake, the government of Zimbabwe 17,1% and the Libyan Arab Foreign Bank with a 15% stake.

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