FINANCIAL services group, ZB Financial Holdings (ZBFH), is expecting to comply with the central bank’s conditions to surrender the licence of its building society unit by year-end.
Building societies in Zimbabwe are required to maintain a minimum capital level of US$20 million or its equivalent in local currency.
In its 2024 annual report, ZBFH said that the building society had not complied with this requirement in prior years, leading the firm to offer to surrender the subsidiary’s licence.
“As a result, the Reserve Bank of Zimbabwe (RBZ) issued a corrective order against the society on 2 July 2024 to rectify the capital shortfall,” ZBFH said.
“The society has addressed the corrective order by implementing the resolution made by its directors on 1 December 2022 and its shareholders on 31 July 2024 to surrender the building society’s operating licence to the RBZ.”
ZBFH said the RBZ had responded with conditions that needed to be satisfied before the surrender of the licence.
“These include, but are not limited to, certain information requests, ensuring that the deposits are handled in compliance with the Consumer Protection Framework No. 1-2017/BSD. The society is in the process of working towards fulfilling the conditions,” ZBFH said.
“The directors have assessed these conditions required by RBZ for the surrender of the licence and concluded that it is highly probable it will comply with the conditions before 31 December 2025.”
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According to ZBFH, the society was incorporated pre-independence as Founders Building Society and received its trading licence in 1961.
The society then changed its name to Intermarket Building Society and later to ZB Building Society, following the acquisition of a majority shareholding in Intermarket Holdings Limited by the group.
“The main business of the society is the mobilisation of deposits from which it makes advances to the public and corporate bodies on the security of their deposits with the society,” ZBFH said.
During the period, ZBFH deposits and other related funding account balances closed the year under review at ZiG5,48 billion, representing a growth of 120% from 2023.
The growth was supported by an increase in United States dollar deposits across all sectors.
During the same period, the group’s gross advances totalled ZiG4,15 billion, up from the prior year’s ZiG2,21 billion, driven by loans, overdrafts and other accounts.
Considering that this year is the final year for the group’s 2021-2025 medium-term plan, ZBFH has begun laying the foundation for the group’s next medium-term plan.
“The group has begun to lay the foundation for the next medium-term plan, long-term sustainability as one of the core tenets underpinning its strategy, and towards this end is one of the financial institutions seeking certification under the central bank-led Sustainability Standards Certification Initiative through the European Organisation for Sustainable Development,” ZBFH chief executive officer Shepherd Fungura said.
