State funds snap up 60 pct of CBZ

AT LEAST three state-linked institutions – the National So­cial Security Authority (Nssa), the Public Service Pension Fund (PSPF) and Mutapa Investment Fund (MIF) – now control about 60 percent of CBZ Hold­ings (CBZ), as the government moves to strengthen its position in the country’s largest financial services group.

The development comes as authorities move to de-risk the Zimbabwe Stock Exchange-listed company. Akribos Nominees has made a profitable exit since acquiring a 23 percent stake in the bank in 2019 and the entry of cash-rich institutional investors is also expected to boost the group’s funding capacity, and the country’s develop­ment agenda.

“A deep-pocketed institutional anchor im­proves shareholding stability, market confi­dence and access to long-term funding. If this is a subscription for new shares, it also injects fresh capital,” economic analyst Stevenson Dhlamini said, adding this “transaction was key for market liquidity and CBZ’s greater sta­bility”.

“Channeling pension savings into a major banking group can deepen capital markets and support developmental lending. It also makes the proposed US$600 million infrastructure (fund) more credible because institutional in­vestors with long-term liabilities are natural buyers of infrastructure paper,” he said.

“The PSPF is backing CBZ’s ambition to become the main financier for infrastructure, so it also gives CBZ more firepower and cred­ibility to underwrite the bond, and future pub­lic-private partnership projects… in various sectors (including) energy, housing and roads,” another analyst, Titus Mukove said, adding the ZiG2,6 billion price paid by PSPF was justifi­able given the bank’s size and banking sector position”.

“CBZ is the biggest bank by deposits, it has a strong balance sheet and (surely it) trades at a premium to most banks because of its scale, and dollar earnings. So, the PSPF’s payment of a… slight premium for 20 percent makes strategic sense as they are securing a stake in a systematic bank rather than… timing the mar­kets,” he said.

While the bank’s market capitalisation has vaulted to nearly US$1 billion and the counter or stock hit a 52-week high at the close of the transaction – and on the back of a 250 percent rally since the beginning of the year – the PSPF investment was specifically made to diversify the pension fund’s portfolio outside real estate, hospitality and other infrastructural assets.

With 62 million-plus shares exchanging hands recently and representing about 12 per­cent of the listed company, the special deal valued CBZ Holdings at US$806 million – around 16 percent above the counter’s market value of approximately US$700 million on the day of trade – and prompting other analysts to say the multi-million dollar fund “had paid a fair value for a bank or asset with a per earn­ings ratio of 10 to 15 percent”.

While Nssa remains the largest shareholder with 23,5 percent, the PSPF is now second and MIF is number three with a nearly 18 percent – and subsuming the Ministry of Finance’s stake.

Thus, the government’s strategic intent is not only to create a “super bank to power economic growth and service delivery proj­ects”, but replicate a globally-proven model and where certain nations have at least one strong national institution to underwrite gigan­tic projects as well as warehouse pensioners’ long-term investments in a solid, and profitable venture. newsdesk@fingaz.co.zw