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CFX deal almost sealed

Eric Chiriga

THE acquisition deal of Century Bank Ltd, Century Asset Management and Leasing Company of Zimbabwe (LCZ) by CFX Financial Services Ltd is on the verge of completion with Century Holdings Ltd (Ce

ntury) awaiting shareholder’ approval.

“Century Holdings will ask shareholders to approve the disposal of Century Bank Ltd, Century Asset Management and LCZ in exchange for shares in CFX Financial Services,” Lynne Mortimer from CFX said.

Mortimer said if the shareholders approve, the deal will see CFX listing on the Zimbabwe Stock Exchange (ZSE) and acquiring a commercial bank, a leasing company and an asset management firm.

The enlarged entity will provide one-stop banking where clients will have access to all banking activities and a wide range of other services at the same institution.

CFX was established in April 2002 and has grown to become one of Zimbabwe’s largest merchant banks.

CFX will also bring in their merchant bank.

It has a deposit base with over $60 billion in depositors’ funds and a loan book of $120 billion.

If the transaction is approved CFX will become the newest counter on the stock exchange.

Experts say by going into Century, CFX would be well positioned to secure cheap funds that come with merchant banking.

The experts however doubt whether the deal will remove the impression that Century is facing liquidity crisis.

CFX took over the failed Universal Merchant Bank (Unibank) in 2002, but the shareholding structure has been out of line with the Banking Act, which stipulates that an individual’s shareholding should not exceed 10%.

Sean Maloney, founder and executive chairman of the holding company, CFX Holdings, holds 66,59% in the merchant bank, Chese Chese Investments.

Other shareholders include CFX managing director Wilson Gwatiringa who was also involved in the rescue of Unibank.

The Reserve Bank of Zimbabwe, which took steps to clean up the financial sector, instructed Century and other frail banks to seek equity partners.

There have already been moves to merge various commercial banks that were facing collapse.

Banks seeking mergers include First Bank, Trust Bank, NMB Bank and Royal Bank.

They have been given until the end of August to clean up their act or face various RBZ penalties.

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