Addressing journalists last week, Premier said it opted for short-term pain in order to achieve long-term gains
“Our strategy is to grow from loss to profit by the end of the next financial year. This includes turning around the loss incurred this year,” Manyere said.
Chief Finance Officer Walter Kambwanji said they were certain the Ecobank investment and subsequent repositioning would see an improvement of the bank’s fortunes.
Ecobank Sadc Cluster Head for the Ecobank Group Daniel Sackey will head Zimbabwe operations while based in Harare.
Sackey said the acquisition by Ecobank would result in PFG turning into a fully re-branded Ecobank affiliate and becoming the hub for Southern Africa as the institution starts making profits.
“We need to create confidence in the banking sector in Zimbabwe. There will be restructuring at Premier, new faces will be coming in, whilst others will be leaving,” Sackey said.
Manyere said the special arrangement of Ecobank controlling 70% of PFG will subsist until 2011, and at a time local shareholders would be expected to be able to increase or ratchet up their stake in line with the country’s indigenisation laws that requires locals to own 51% in foreign owned companies.
As of this week, local shareholders hold a measly 14%, while Germany’s African Development Corporation and KMQ Enterprises of Mauritius hold the difference.
“In that regard, our indigenisation approval includes increasing local shareholding to 30% by March 2011 and thereafter work towards achieving the balance of the thresholds within the specified timeframes by the law,” Manyere said.
Ecobank operates in about 30 African countries and has since pledged US$10 million to recapitalise the group.
The bank is listed in Ghana and Nigeria.
Ecobank also has affiliate offices in some European countries. The bank boasts a US$1,3 billion capitalisation base.
Sackey said the transaction had received regulatory approval from Zimbabwean authorities.
Ecobank group CEO Arnold Ekpe said that the acquisition was the outcome of their strategy to have a presence in each of the Sadc countries.
“This now gives us a better position to help strengthen the economies and the financial integration in the region,” said Ekpe.
“Zimbabwe presents enormous potential for growth and we intend to help develop the country’s business sector through our expertise in Africa and our unrivalled network on the continent.”
Sackey said: “The institution will soon turn into a fully rebranded Ecobank affiliate. We expect the bank to become profitable and to play a prominent role in the consolidation of the Zimbabwean economy.”
He said their key objective was to apply a strong foundation for developing Premier Bank into a leading banking business in Zimbabwe.