Harare - Standard Bank Group [JSE:SBK] wants to keep a majority stake in its Zimbabwean unit Stanbic Bank, its new joint chief executive said on Thursday.
Foreign companies, including banks, are being asked to cede 51% to indigenous Zimbabweans under the controversial Indigenisation and Economic Empowerment Act.
According to Reuters, Standard Bank believes giving away majority ownership will make it difficult for the bank to deploy new technology as well as raise new capital when the need arises.
New joint CEO Ben Kruger was quoted as saying: "It is difficult for us not to have the majority shareholding. You cannot deploy the right technology and it becomes very complicated if you need to raise capital.
"If anything goes wrong from a macro point of view in a country, you need to mobilise liquidity and capital very quickly to solve that equation."
Stanbic Bank Zimbabwe is wholly owned by Standard Bank and will have to cede 51% to locals if Empowerment Minister Saviour Kasukuwere prevails against the Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono, who is opposing the equity model if favour of what he calls the supply side model.
President Robert Mugabe also spoke in favour of banks: "For that one (financial services sector) you can go 50/50, or you can agree on a ratio that is sustainable and equitable. It’s not in every case that we must apply the 51/49."
Kruger said Standard Bank has already presented Harare with proposals on how it would increase local shareholding, although he declined to give details.
Meanwhile the RBZ on Thursday extended the deadline for commercial banks to reach the US$100m capital thresholds from 2014 to 2020.
Gono said the extension was is in response to concerns raised by some foreign investors interested in investing in the banking sector, but wary of the indigenisation and empowerment regulations compelling foreign-owned firms to cede a 51% to locals.
Gono said minimum requirements are not the solution for a safe and sound banking system, hence the need for engagement to reach common ground.
“Let me make it clear that we are more than aware that capital on its own is not the panacea for creating a stable banking sector in the country,” said Gono.
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