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-million dollar cash transaction.
It was an open market deal in which about 12,3 million shares, equal to 11,8 percent, were exchanged on the Zimbabwe Stock Exchange where BancABC has a secondary listing.
The shares were sold at US45c, giving the transaction value of US$5,5 million. The other shares were sold on the Botswana Stock Exchange where the regional financial group is primary listed.
BancABC chief executive Mr Doug Munatsi said the regional financial group “should benefit from the African Development Corporation’s extensive European investor network”.
ABC is not new in the country’s financial service sector. Last year, the German-based company bought a 54 percent stake in Premier Banking Corporation which it later sold to Ecobank of Nigeria.
Mr Munatsi disclosed the ADC investment when commenting on full year financials to December 31, 2010. He said all operations made a profit for the first time in history.
Operating profit rose 320 percent to 111 million pula from 26 million pula during the previous period. The group said even its Zambian subsidiary posted strong profits after it injected fresh capital of US$6 million.
As opposed to 2009, when non-recurrent income contributed significantly to the group’s profitability, BancABC realised much of its earnings from core banking activities.
Net interest income climbed 67 percent to 298 million pula as loans and advances rose by 54 percent while net interest margins improved from 5,6 percent to 5,8 percent.
The cost to income ratio was down to 77 percent from 82 percent.
Operating expenses increased by 19 percent largely driven by extensive roll out of retail branches. The exercise cost about US$18 million. The group has stepped up its goal of becoming a universal bank, offering a diversified range of banking services. It has to date opened 17 retail branches across the region.
Impairment charges on loans and advances were down by 69 percent despite BancABC Tanzania recording a 41 percent increase.
The balance sheet expanded by 36 percent with deposits increasing 46 percent while loans and advances rose 54 percent to 3,1 billion pula. BancABC Botswana and BancABC Zimbabwe largely accelerated growth in deposits.
Notwithstanding a loss of US$2,9 million from its associate PG Industries, the group’s attributable profit at 67 million pula was 67 million pula ahead of 58 million pula made in 2009.
Zimbabwe had the highest after-tax profit of 27 million pula after the group recapitalised the local subsidiary to the tune of US$10 million last year. Deposits rose by 316 percent to 1,1 billion pula. Loans and advances rose 810 percent to 0,9 billion compared with the previous comparable period.
Mr Munatsi said BancABC had benefited from the widespread recovery experienced in Sub-Sahara Africa as the economic woes of 2008 and 2009 receded. The country in which the group operates benefited from strong commodity prices.
While the group’s wholesale banking continues to generate better numbers, the progressive investment in retail is expected to yield higher returns during the next three years. Mr Munatsi said the group would raise money to capitalise its divisions in light of growing competition.
“We are focusing on strengthening our subsidiaries. Other players are investing where we have operations. It is then important to raise capital since it is the major driver on our ability to raise deposits. It is critical that all our subsidiaries are well-capitalised.”
He said the group would decide on the amount required.