ATLAS Mara, the parent company of retail bank BancABC says it has inched closer to taking over Zambia’s six largest bank as the group continues with its acquisitive strategy to grow its earnings and expand its foothold in the region.
Atlas Mara, an investment company co-owned by former Barclays Plc chief executive Bob Diamond, last year acquired ABC Holdings — which owns BancABC which has its presence in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe.
Earlier this month, the group said it was looking to expand into seven more countries in sub-Saharan Africa through acquisitions.
Announcing its financial results for the nine months to September where it posted an after tax profit of US$7,1 million, the group said negotiations to acquire total control of Finance Bank of Zambia were at an advanced stage.
The group said the financial performance of the Southern region year-to-date was supported by, among other factors, asset recoveries emanating from continued management efforts, particularly the increased focus on non-performing loans and the establishment of new collections activities.
“The potential transaction is subject to the parties entering into definitive documentation and the subsequent satisfaction of selected conditions precedent (including requisite regulatory approvals). The Company expects that definitive documentation will be signed shortly,” the company said in a statement accompanying the financials.
“Subject to agreeing definitive documentation and the subsequent satisfaction of relevant conditions precedent, Atlas Mara anticipates that it would acquire FBZ for approximately US$60 million in cash and 2.6 million Atlas Mara shares (this may increase to US$61 million and up to 5.7 million Atlas Mara shares, subject to a number of conditions, including the Zambian Kwacha/U.S. Dollar exchange rate at closing and the meeting of specific future profitability targets). Subject to signing definitive documentation, Atlas Mara would expect the transaction to close in Q1 2016.”
The group said once completed, the transaction, which would include the merger of FBZ with Atlas Mara’s Zambian subsidiary, African Banking Corporation Zambia Limited, would result in the creation of Zambia’s largest bank by branch network and fifth largest bank by assets with combined assets of approximately US$418 million.
“The enlarged group would be well-positioned to contribute meaningfully to the development of financial services in Zambia and the potential combination would be consistent with Atlas Mara’s over-arching strategic objective of being a “scale” player in its countries of operation,” the company said.