Mugabe asked to stop Barclays sale

Mugabe asked to stop Barclays sale

Source: Mugabe asked to stop Barclays sale – DailyNews Live

Gift Phiri      9 June 2017

HARARE – The Zimbabwe Monetary Institute (ZMI) has asked President Robert
Mugabe and Indigenisation minister Patrick Zhuwao to stop Barclays’ sale
of its Zimbabwe bank to Malawi-listed First Merchant Bank (FMB).

The sell is part of the British lender’s broader exit from Africa to
refocus on the United States and Britain.

According to the deal hammered out by a team of lawyers, including
London’s Norton Rose and Addington Chinake of Kantor & Immerman, FMB will
hold a 42 percent stake, Barclays 10 percent until 2020 and other sitting
shareholders will retain their 33 percent.

This comes as all 700 Barclays Bank of Zimbabwe employees – set to
transfer to the new owner – were also moving to lobby government to block
the bank’s takeover by Malawi’s FMB, amid reports that management’s bid,
led by Barclays Zimbabwe managing director George Guvamatanga,  had
support of the State pension fund National Social Security Authority
(Nssa).

The deal is expected to complete in the third quarter of this year.

The ZMI said in its letter to Zhuwao, also copied to Mugabe and the deputy
governor of the Reserve Bank of Zimbabwe Kupukile Mlambo, that money
creation in Zimbabwe was a sovereign right and no foreign-owned companies
or foreign-controlled companies should exercise it.

“We understand that Barclays Bank plc is going to dispose of its
shareholding in its Zimbabwean subsidiary.

“We wish to state our position, as regards foreign-owned and
foreign-controlled commercial banks; foreign-owned banks and
foreign-controlled banks should not be entitled to create money in
Zimbabwe,” Farai Pasipanodya, the director of the ZMI said in the letter.

“Every time the banks lend, they create money that has not existed before.

“They do not wait for someone to deposit money before they can lend. They
actually create new money each time they lend.”

Barclays did not announce a price but said the deal would remove $375,69
million in risk-weighted assets from its balance sheet.

The ZMI said government should legislate that foreign banks, or even all
banks, should limit their lending to moneys deposited by customers and to
those invested by shareholders.

Under Zimbabwe’s Indigenisation and Economic Empowerment Act, all foreign
companies were supposed to sell at least 51 percent of their holdings by
March 31 last year, part of Mugabe’s black empowerment drive, but they
failed to comply with the deadline to transfer majority shares to locals.

Foreign banks in Zimbabwe include Barclays Plc, Standard Chartered Plc and
South Africa’s Stanbic Bank Ltd.

ZMI called for nationalisation of money creation.

“We will go further and state that the bank creation of money should be
indigenised to such an extent that we recommend that it be nationalised,”
Pasipanodya said.

This was after Barclays  early this month announced a decision to end its
105-year presence in Zimbabwe by agreeing to sell its operations in the
cash-starved African country to the Malawi-listed lender.

First Merchant Bank already has stakes in Capital Bank in Mozambique and
Botswana and First Capital Bank in Zambia. But this is its first
investment in Zimbabwe.

The agreement came days after Barclays said it had cut its stake in its
main African operation from 50 percent to 15 percent, selling control of
the Johannesburg-listed business, which has always remained separate from
the UK bank’s Zimbabwe business.

Barclays first established a presence in Zimbabwe when it was still a
British colony in 1912. It is selling its two-thirds stake in Barclays
Bank of Zimbabwe, which is listed in its home country with a market
capitalisation of $73 million.

The deal means Standard Chartered is the only western bank left in
Zimbabwe, which is grappling with a severe dollar shortage and political
uncertainty over Mugabe, the 93-year-old president, ahead of next year’s
election.

Barclays Bank of Zimbabwe, which has $476 million of total assets and made
$10.9m of net profit last year, is a similar size to First Merchant Bank,
which has $450 million in assets and made $10 million of profit last year.

COMMENTS

WORDPRESS: 4
  • comment-avatar

    Foreign owned banks to do what? The best performing bank now is Stanbic a division of Standard bank of South Africa. Business doesn’t operate like Uncle Bob give Zhuwao ,chikore and all relatives jobs then don’t care about the rest 95%

  • comment-avatar
    CFR 6 months

    Who the f… is Mugabe to decide?

  • comment-avatar
    Barry 6 months

    Barclays only leaves the sinking ships. And if it can’t sell it will simply walk away. Nothing Bob can do about it.

  • comment-avatar
    Ann 6 months

    Did the big man not tell uk to take their money and go to hell. His prayers are now well and truely answered.