Rot at CBZ will now be a thing of the past

CBZ Holdings Limited, in September 2019, appointed Marc Holtzman as the chairperson of its board. Holtzman, who comes in with over 30 years of banking experience, says it is possible to turn CBZ into a world-class investment bank, capable of competing with international institutions despite the current economic conditions prevailing in the country.

Business reporter Melody Chikono (MC) this week spoke to Holtzman (MH) to understand his vision for the bank as well as other issues. Below are excerpts of the interview:

MC: According to reports you recently fired a number of senior executives. Is it part of your restructuring?

MH: First of all, if I can just put it into perspective. I come to this country with 30 years of experience in emerging frontier markets. And I will say that when you put this in perspective, what attracted me most here is the fact that this is the most exciting emerging frontier market turnaround I believe I have seen in my life time.

To be more specific of what I’m saying, this is a well-known fact and I’m singing to the choir when I say this to you — not only is Zimbabwe a well-known fact that we have abundant natural resources; not only were we once a bread basket of Africa, but I believe that when those natural resources are economically and efficiently developed; when our agricultural sector turns around; and when we look at the opportunities to build a real world-class service sector in this country, I’m 100% convinced that this country is going to move forward. And when we combine that with the openness of the govement leadership to create the pre-conditions, even the fact that His Excellency (President Emmerson Mnangagwa) reached out to someone like me to give me this opportunity to, hopefully make a positive impact, I see this as one of the most exciting opportunities.

So I wanted to give your questions context. This is not my first restructuring. I have done this in Kazakhstan when I was chairman of their largest bank, and I have mentioned to you Rwanda. I have been doing this for 11 years. When you come into markets, and it’s no disrespect, but sometimes you need fresh, new energy and a new perspective.

So we thought a lot of people have been with the bank for many years and have done great work, but banking is going to change in the next 10 years more than it has done in the last 300 years, and sometimes the team that got us to where we are today needs to be changed to improve the augmented going forwards.

We are living in a much disrupted environment. There are competitors. Banks are not the only financial institutions, there are mobile companies. Even the payment providers and service platforms. So this is not just my view. It is also the view of the CEO and I got the blessing of a lot of my colleagues that we needed to take a great team and make it even better.

Let me give you an example, our new chief financial officer (CFO), Tawanda Gumbo, was the head of all sub-Saharan Africa for Deloitte and Touché. He stayed in Johannesburg.

And one of the things I have come to realise is that there is so much talent in the diaspora than in Zimbabwe, but because of the fact that the two previous governments of the over 50 years, I’m not just talking about the last one, but even the one before that going into the 1950 and 1960s, many of these people did not see opportunities in Zimbabwe. Now the fact that Gumbo came back to be the CFO and moved from South Africa, is one indication that of a huge change in this country.

So in any one organisation, sometimes having active refreshing and growing mind is a necessary thing.

MC: Recently, Akribos Capital, on behalf of a mysterious investor snapped a controlling stake in CBZ. Can you shed more light on this transaction?

MH: Well, I will say this and I mean this with every bone in my body. I am the chairman of this institution and as such my job as chairman is to serve every single shareholder whether it’s the government, Nssa (National Social Security Authority), the pensioners of the country or a very small investor who has a single share in CBZ.

I recognise that my fiduciary responsibility as chairperson is to serve every single shareholder in this organisation, but even though that is my responsibility to shareholders, when you are a chairperson of the largest bank, you have the responsibility to the country and community to give back and make sure that you have the best customer service in the country.

These are areas we are working on and at the right time we will get there. When I look at our technology platform it’s alright but it can be great — within a year it is going to be sure great and so much better than those in countries like my birth place, the United States.

When I say that, you may step back and say “what is he talking about?” But financial services in the big banks in the US are so attached to legacy IT systems and what they and the way they always envisaged, say for instance, even young people when they pay bills in the US, most of them still use cheques.

So, in other words, most people have been victims of their own successes and it is hard for them to change the basic legacy systems. The good news is, in the story like CBZ, we can be nimble, we can be quick and we can transform ourselves.

And in many cases like Rwanda and the Kazakhstan, the banking platforms that are used to serve the customers are literally state-of-the-art.

MC: But the way that transaction was carried out had people raising eyebrows.There was no transparency around the transaction. People are still questioning who the investor is?

MH: I know what you are talking about, but let me say that tomorrow (yesterday) we are going to announce our board of directors, I hope you will be deeply impressed. We have some world-class people joining our board as well as some impressive local people. I’m not permitted to say anything until tomorrow (yesterday) as we are awaiting the last approval from our regulator, the central bank.

But what you should see is that these are not people who would associate with an organisation that has anything less than sterling corporate governance. Some are people l have worked with in the past; some are people who I recently met. We are recruiting the best talent and we also have some women joining the board as well. I think that should put to rest any concerns that people have about one shareholder having any more influence more than another.

And as said before, at the risk of repeating myself, I’m just as beholden to one shareholder as I am to Nssa representing all the pensioners of the whole country.

MC: I understand, but there has been talk of Kuda Tagwirei (of Sakunda Holdings and a Zanu PF benefactor) as being the investor? Do you know him?

MH: Yes, I have met him. I know most of our major shareholders. So let me address that. I don’t mean to sound as if I’m presumptuous or as if I’m blowing my own trumpet, but if you will give me the benefit of looking at my background and the experiences I have had over the years; If you look at the results that I had in these institutions where I have been responsible for transformations, you will see that I have never led an organisation with any shareholders that have had any different influence than others. I deeply believe in corporate governance and transparency and I hope that one of the reason why the President reached out to me.

MC: So in line with your keenness on corporate governance. Besides the involvement of Tagwirei in CBZ through command agriculture, CBZ has also been involved in some dodgy deals such as facilitation of the Marry Chiwenga alleged externalisation, among others. Are you not worried about your reputation as a bank?
MH: For me it’s about ethics, character and integrity and that is the theme that I continue to preach and to use in everything we do. There is no question that every financial institution in this country, under the previous regime, had something that may not have been appropriate. But as far as I’m concerned, there is a new sheriff in town and things are going to change — any transgressions from what is the highest ethical standards will not be tolerated.

And one of the things that I’m really pleased to share with you is that after the organisation has been slapped by some major penalties by OFAC (Office of Foreign Assets Control), one of the things I have done as chairman is to dive into this.

We have hired the best counsel in Washington and we are working very closely now with the US government in particular to solve this. We are making great strides at cleaning up where there may have been deviations from the normal. So I cannot be held accountable for things that happened before I got here. But I can be responsible for what is happening now and I’m proud to take full responsibility.

We are ready to separate politics from business. It is mentioned in the CBZ charter that the government, as the largest shareholder, recommends the chairman and it’s under that pretext that the president reached out to me. He told me two things: he said Marc, I assure you that there will never be any undue government influence in any internal decisions and I’m giving you the full authority to make any decisions in the organisation that you think need to be made.

And I will tell you that the restructuring, people felt it was necessary. It was a normal business transaction as would happen in any other business, in any other country.

MC: CBZ has also been fingered in a scandal where it offloaded the new Zimbabwe dollar currency on the black market a few hours after it was received from the central bank? How safe are depositor’s funds with you?

MH: We are the largest bank. We have a successful and sound institution. Most importantly, I can say without doubt that our corporate culture is now guided by the highest ethical standards. And that anything else is certainly not tolerated.

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