CBZ plans to list US$50m bonds in Mauritius

allow foreign participation.
The bank’s chief finance officer, Mr Never Nyemudzo, announced this during the Imara Zimbabwe investor conference last week.
Investors had asked if the bonds are tradable locally.
“We are processing listing of the bonds in Mauritius where they can be traded to allow foreign investor participation,” said Mr Nyemudzo.
Zimbabwe does not have a treasury bond market. To establish a viable and stable bond market requires high financial sector developments.
When the bonds were floated they received overwhelming support from international investors, who came in with US$35 million compared with the local participation, amounting to US$15 million.
The bonds are CBZ Bank’s and the Africa Export and Import Bank’s initiative to develop infrastructure projects in the country.
The two banks launched the three-year bond in South Africa and Botswana and would attract an annual interest rate of 7,5 percent and 8 percent. Afreximbank are the guarantors of the bond.
CBZ is playing a intermediary role in mobilising affordable medium- and long-term capital to enhance economic growth in the country.
CBZ Bank, the largest bank in the country by assets, is already on a high loan-to-deposit ratio of about 77 percent.
However, growth in the country’s financial sector is expected to continue as international banks such as the Afreximbank and the PTA Bank increase lines of credit into the country’s strategic investments.
Meanwhile, the group is also looking for a phenomenal US$300 million offshore funding to unlock property developments in Harare.
CBZ Bank controls 28,3 percent of the market share. It is also looking for an additional US$100 million offshore for low-cost houses.
Continued funding is expected to push the average mortgage life size from the current levels of five years to between 10 and 15 years.
Interest rates on mortgages at CBZ attract 14 percent when the bank is outlaying cash and 16 percent when the property is bought from CBZ.
After the adoption of the multiple-currency system in 2009, CBZ Holdings has been concentrating on diversifying and improving its fee income streams.
The group views insurance products as an area of significant future growth.
In the first half of the year, the group launched a life insurance operation. The group’s ability to “cross sell” non-banking products to its large customer base would also improve future profitability.