Please be Patient. . . We Seem to Have Domestic Problems — PFG

IMAGINE being an authority in offering advice to other people on how to make money and investing wisely so that they would not have to work for money, but have money working for them.


Despite this wealth of knowledge, you ironically struggle to find immediate solutions to your own financial problems and in-house politics.

 

There is something contradictory about Premier Bank. Despites its name, it has not been a leader as far as solving shareholding controversy is involved. The group is failing to practise what it preaches to clients and has diverted from it core business.
Having five chief executives in two years is a glaring indicator that something is wrong at the bank. The five are founder Exodus Makumbe who had become more of a brand and was creative and focused. Market watchers say the “DNA” of the bank’s commercial existence abruptly went away with him. There was Raymond Chigogwana who was knowledgeable but very unpredictable. Barrie Hounsell was an experienced man who read the market well and then came George Manyere, a determined businessman who had been interim CEO before Peter Wood — a guru in corporate and investment banking — took over. Wood resigned last month. Indications are that current managing director, Douglas Mamvura was likely to take over the “hot seat” but for how long, only time will tell.
Events at Premier could explain why during the interim period ending June 30 2009, the institution actively pursued structured finance transactions, arguing that it was because core banking business was taking longer to achieve levels that could sustain a bank in a market where liquidity is low.
“During the period under review, there was a 28% change in shareholding. This change is still awaiting regulatory approval,” said Premier Chairman Sengi Mlambo.
During  the period  under review businessman Temba Mliswa is said to have snapped up 8% shares in Premier from former Chigogwana who has since left the bank. In a statement last month, the board said Mliswa was not part of the bank saying “they had nothing whatsoever to do with Mliswa”.
Analysts said the bank should have handled the matter internally instead if washing their dirty linen in public at a time when the banking sector was becoming stable and trying to instil confidence in depositors and potential investors.
According to information gleaned from various interested parties, as at August 31 2009, the Premier shareholding was Temba Mliswa —  8%, a George Manyere-led consortium — 28%, Norman Mataruka — 25%, SPV companies owned Blazio Ginio Tafireyi — 25%, Fortune Chasi — 5%, Sengi Mlambo -2%, Tracy Mutaviri, — 1%, a Moyana; — 5%.
Barrie Hounsel who had 1% is said to have sold his shareholding. It could not be immediately established who now owns the shares.
Despite boasting that they lead the market in proving financial solutions to customers, the group posted a net loss before tax of US$94 000 during the reporting season.
“The group leads the market in providing financial solutions to its customers,” Mlambo said.
The group however had positive cash flows from operations of US$515 000. Its balance sheet was US$20 million as of June 30 compared to US$9,6 million as of December 31 2008. Net interest margin was 45% while cost to income ratio was at 105%.
“The group capitalised on this competitive edge, while ensuring effective control of risk and operating costs. Over the period under review, this strategy has allowed the group to grow its asset base while at the same time realising positive cash flow,” he said.
As at June 30, the group achieved a capital adequacy ratio of 39% compared to the regulatory requirements of 10%.
While the bank did not say whether it had enough capital requirements as required by the Reserve Bank of September, it is expected not to find the deadline difficult to achieve.
“Given the stability in the financial sector and planned recapitalisation, which enhance investor confidence, the group is projected to recorded positive growth,” said Mlambo about the banks outlook.
He also said the bank was not exposed to any risk in future.

Paul Nyakazeya

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