KINGDOM Financial Holdings Ltd is actively pursuing an acquisition in Botswana as it attempts to break into the diamond rich southern African country’s domestic market.
The acquisition is in line with the financial services group’s expansion drive in the region. KFHL says expansion into the region has continued to accelerate in recent years and will become stronger as they reach critical mass.
“Kingdom is actively pursuing an acquisition in Botswana, which will enable us to move into the Botswana domestic market, subject to regulatory approvals,” the group said this week.
“The geographical spread of Kingdom’s operations, within high growth economies in southern Africa, will also diversify its income streams thereby reducing the risk associated with operating in one country.”
Locally, the bank views the financial environment as creating new opportunities to expand the business model at compelling acquisition costs and that these opportunities will be considered as they arise subject to their ability to make a positive contribution to Kingdom’s operations.
“The significant and consistent growth delivered by the company (KFHL) since its listing on the Zimbabwe Stock Exchange can be attributed to clients who have demonstrated confidence in the group from inception and executives who have extensive experience in their respective areas of operation,” the group said.
The group believes that management who continually adopt a proactive, innovative approach to winning and retaining business, and staff who embrace the group’s culture of dynamism and innovation based on its “Team Kingdom ethos” have helped steady the “ship in stormy financial waters”.
Kingdom’s diversity has not only made the group a “one-stop shop” financial institution, but has also allowed it to effectively maximise group synergies and cross-selling of products for the benefit of clients and shareholders.
A four-for-one $100 billion rights offer opened on Monday this week and will run for two weeks. The proceeds will help KFHL consolidate its position in the changing financial landscape.
The financial services environment has changed significantly since November 2003. This period witnessed astronomical increases in interest rates to levels approaching 1 000% though these rates have since receded to below 150% per annum.
“However, the increase left an indelible mark on the financial landscape. The level of provisioning in the financial sector has increased due to potential bad debts as a result of the high interest rates suffered in the brief period from November 2003 to March 2004,” the bank said. The increase in provisioning continues to deplete the capital base of financial institutions, including that of Kingdom Bank Ltd.
There were several bank failures in 2004 caused by liquidity constraints and high interest rates in the market. Most of the failures were recorded among indigenous banks incorporated after the liberalisation of the financial sector in 1992.
Kingdom says it managed to weather this storm but its position in the market needs to be buttressed.
“Capital raised through the rights offer will also make the public feel more secure and confident when dealing with the bank,” it said.
KFHL has also announced a new board of directors which has seen the return of founder Nigel Chanakira as a non-executive director. Chanakira is now based in Cape Town.