SOUTH Africa’s Absa Holdings is planning to dispose of its stake in local banking group CBZ Holdings to South Africa’s First National Bank, s
ources indicated this week.
The deal is expected to be consummated at exactly the same time Absa will announce its acquisition of Barclays Zimbabwe, part of the Barclays Inc group that acquired Absa Holdings’ operations in South Africa last year.
Sources from South Africa indicated that Absa’s key men in the process, Dona Botha and Peter Mageza, were in the UK in discussions with their principals at Barclays Inc on the issue.
Both are in charge of Absa’s African operations.
They were expected back in South Africa on September 7.
Absa is planning to integrate its African businesses with those of Barclays, which bought into Absa last year for US$5,5 billion.
Following the acquisition by Barclays, Absa is now in the process of acquiring Barclays’ subsidiaries on the continent, a move that is likely to see the group having two commercial banking licences in the country.
Absa already holds controlling stakes in banks in Mozambique, Tanzania and Angola, and minority stakes in banks in Zimbabwe and Namibia.
Barclays has a commercial banking operation, Barclays Zimbabwe, the third largest financial institution in the country in terms of assets.
Absa’s has a 25% stake in CBZ Holdings, now the second largest banking institution in the country in terms of assets.
The stake is valued at $86 billion under the new currency system. This amounts to US$7 million at the ruling official exchange rate.
Sources in South Africa said FNB and Absa had already held preliminary talks with regulatory authorities in Zimbabwe.
The Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono is understood to have already indicated to Absa that they will not allow Absa to have a foothold in two commercial banks in the country as that would curtail competition.
Gono was previously the chief executive of CBZ Bank and was instrumental in bringing Absa into the institution as an investment partner.
Sources in South Africa said a financial arrangement was already being worked out between Absa and FNB, which is likely to make the acquisition through parent company, FirstRand, dually listed on the Johannesburg and Namibian bourses.
Since the acquisition will be done offshore, there is unlikely to be any foreign currency injection into the country as a result of the transaction.
However, there were indications that government, which is the second largest shareholder in CBZ Holdings with a 17% stake, could dispose its shareholding to FNB for foreign cash. FNB is understood to be seeking control of the banking group.