Windfall for Barclays workers

Windfall for Barclays workers

Source: Windfall for Barclays workers – The Standard June 11, 2017

The Zimbabwe Banks and Allied Workers Union (Zibawu) has thrown its weight behind the acquisition of Barclays Bank Zimbabwe by a Malawian investor — First Merchant Bank (FMB) — after the new shareholders pledged to allocate 15% equity to workers.

BY BUSINESS REPORTER

FMB recently won the right to acquire a controlling shareholding in Barclays Zimbabwe after its parent company, Barclays Plc, indicated last year that it was disposing of its stake in the entity.

A group of individuals from the bank’s local management team with the financial backing of the National Social Security Authority, is also interested in buying the stake.

Zibawu acting general secretary Shepherd Ngandu told Standardbusiness on Friday that the new shareholders had indicated that employees would have 15% shareholding.

“As employees, we were looking at 25% employee ownership. The incoming investor has given 15% to the employees,” he said.

“This means that employees will have 17% shareholding if you consider the 2% that they already own.

“For us, this is the right direction, although we wanted 25%.”

Ngandu said workers would have supported the management consortium had they been kept in the loop.

He said Zibawu had met the Reserve Bank of Zimbabwe which informed them that the due diligence it carried out favoured FMB.

Zibawu, Ngandu said, would meet RBZ to ascertain where the problems in the transactions were emanating from, adding that the union was in favour of any transaction that “ensures social security, the going concern of the institution and will not result in a round of bank failures”.

Last year, British multinational banking giant, Barclays Plc, announced that it was putting Barclays Zimbabwe in its non-core division with an intention to sell in future.

Barclays Plc owned 68% shareholding in Barclays Zimbabwe.

It said it could not continue to combine Barclays Bank Zimbabwe with Barclays Africa Group Limited as the business “is no longer a good fit with Barclays’ core strategy”.

Locally, Barclays Bank Zimbabwe has withstood the banking storm and is considered one of the safest and profitable banks.

In the financial year ended December 31 2016, the bank saw its profit after tax jumping to $10,8 million from $3,9 million in 2015. Deposits were up 67% to $391,7 million.

Total income for the year was up 27% from the previous year, to $58,3 million.

The bank managed to contain its costs, resulting in the cost to income ratio declining to 73% in 2016 from 83% in 2015.

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COMMENTS

WORDPRESS: 2
  • comment-avatar
    Fallenz 4 months

    Seventeen percent is an enormous equity to hand out. The question is can it be sustained. Likely not. It’s only a carrot on a stick to keep employees from fleeing… especially, those in the upper echolons, but also the lower. Employee turnover, vetting, and training, especially in financial institutions changing hands, can severely impact profitability. Four or five percent is a more reasonable number, and would be the more likely figure inked in any final agreement. Perhaps the union will be made a direct offer under the table to sweeten their coffers in order for them to recommend the employees accept the lower offer. That’s what happens when unions are involved because they are effectively self serving.

  • comment-avatar
    Mazano Rewayi 4 months

    So much for FDI in Zim!!!