ZB seeks technical partner

financial partner as the only viable option for the group to stabilise its finances.
The country’s financial sector has failed to attract meaningful lines of credit coupled with lack of aggressive credit growth thereby exposing most banks to heightened liquidity and credit challenges.
Group chairman Mr Bothwell Nyajeka said in a statement for the financial period ended December 2010 that securing a partner remains the only option for the group.
“The need for a technical and financial partner still remains a viable strategic option for the group, which will continue to be evaluated subject to the exercise of appropriate due diligence,” he said.
The search for a partner comes after the group was considering a private placement to raise an undisclosed amount of money to recapitalise its business.
The bringing in of new partners through a private placement would result in major shareholders being diluted.
The National Social Security Authority is the majority shareholder in the diversified finance house controlling 37 percent followed by the Government with a significant 24,5 percent.
Old Mutual Life has 5,8 percent, and Finhold Employee Workers Scheme 3,01 percent. Mr Nyajeka said the group is being haunted by a judgment that is still pending from the Supreme Court in the matter in which Transnational Holdings Limited is challenging the acquisition of a controlling stake in Intermarket Holdings by the ZB Ggroup.
Besides the disputed acquisition of Intermarket, the Office of Foreign Assets and Control of the United States of America’s Treasury Department has listed the group as a Specially Designated National.
Despite the group’s best branch networks in the country, ZB Holdings has failed to optimally utilise the opportunity to position itself as one of the best performing banks in the country.
Meanwhile, for the financial period ended December 2010, the group posted an operating profit before loan loss provisions and movements in Life Fund liabilities of US$7 million.
Group chief executive Mr Elias Mushayakarara said increased pressure on the operating costs in the second half of the year, driven by increased demand on salary-related expenses, drastically reduced interest margins.
ZB Bank posted a comprehensive income of US$2,7 million having sustained significantly reduced margins on operating costs in the second half of the year.
The bank retrenchment costs amounted to US$242 000.
ZB Building Society achieved an increase of 196 percent on the mortgage book as total comprehensive income for the year amounted to US$1,4 million.
Insurance division ZB Life Assurance saw the continuing trends of low disposable income hampering premiums with gross premium income amounting to US$4,9 million.
ZB Re-insurance’s total comprehensive income for the year amounted to just US$649 000.
Yesterday, ZB traded at US8c per share on the Zimbabwe Stock Exchange.