FINHOLD’S retail banking subsidiary Zimbank will be forced to merge its operations with those of Intermarket Banking Corporation once all the necessary regulatory approvals have been met.
Moreover, since Intermarket is still under curatorship, this effectively means that the powers of the board will reside under the management of Ngoni Kudenga who has been administering the institution’s operations over the past 15 months.
Finhold recently acquired a controlling stake in Intermarket Holdings’ subsidiaries, Intermarket Banking Corporation and Intermarket Discount House, following conversion of a $100 billion debt into equity.
The debt conversion makes Finhold the single largest shareholder in Intermarket’s new share structure with an undisputed 80% stake. The remaining 20% shares are held between the Zimbabwe Development Bank (ZDB), Old Mutual, Fidelity Life, Mining Industry Pension Fund (MIPF) and the Local Authorities Pension Fund (LAPF).
Finhold’s stake in the Intermarkert group effectively guarantees it the operating assets and business of the company.
Of the valuable assets acquired by Finhold is Intermarket’s commercial banking licence and commercial business under its top niche brand, Intermarket Banking Corporation.
Finhold now effectively operates two commercial banks under separate licences.
Finhold has also gained access to Intermarket Discount House’s operations and assets although the financial group is reportedly not keen to take in the long-term.
Although speculation has been rife that since the Banking Act states that “interlocking directorships in the banking industry are prohibited, this is in line with the need to avoid conflict of interest situations in the management of two or more banking institutions”, Finhold has insisted that it’s operating within the confines of the law.
Finhold’s Joseph Muzulu, head of retail, said that since their acquiring of Intemarket Banking Corporation, this will now be owned by his group.
“Since Intermarket is under curatorship, the powers of the board reside with the curator,” he said.
“Consequently, there is no contravention of the Banking Act.”
Finhold is expected to merge the operations of its retail banking arm Zimbank with those of Intermarket and cede Intermarket’s commercial licence to the Reserve Bank.
The group may also explore merging the two commercial operations, ceding the Intermarket commercial banking licence to the RBZ but maintaining the Intermarket brand for its high networth clients.
Muzulu said that the taking over of Intermarket Holdings is a process and not an event, adding that Intermarket Banking Corporation would continue to exist in its present form whose future will be decided later.
Recently Finhold chairman Richard Hove took over the reins at Intermarket in the same capacity as his other board members Elisha Mushayakarara and Sijabuliso Biyam.
The new Intermarket board retains the services of chartered accountants Victor Muchatuta and Passmore Matapure.
In an effort to safeguard its interest, Finhold sent its financial director Ronald Mutandagayi to Intermarket as its new chief executive officer (CEO) taking over from acting CEO, Rindai Jaravaza.