ZAMBIA has begun reaping the benefits of privatising Zanaco with the former parastatal bank paying Government a dividend of K8 billion for the year 2010.
The bank has also paid back to Government K5 billion, which was lent to its employees to buy shares as it changed from State to private ownership.
Receiving the two cheques on behalf of Government in Lusaka, Minister of Finance and National Planning Situmbeko Musokotwane said the privatisation of Zanaco has proved successful.
Dr Musokotwane said before the bank was privatised, Zambians were getting low benefits from it.
“Zanaco at that time was a drain on the taxpayers because we were not getting anything out of it. After deciding to re-align our involvement with Zanaco by selling just part of it, we are now seeing the benefits in terms of dividends. We are also seeing the benefits in terms of improved service to the public.
“This is what we expected. Before privatisation people were peddling stories that employees were going to lose their jobs and that branches were going to be closed. But the number of employees has increased from 1,100 to over 1,300, and more branches have been opened,” Dr Musokotwane said.
He said the lesson that Zambians must learn from the privatisation of Zanaco is that they should be careful with people who encourage them to be satisfied with the status quo even when they have seen problems.
Earlier, Zanaco managing director Martyn Schouten said the K8,085,000,532.00 dividend the bank paid yesterday brings the cumulative dividend paid to Government in the past three years to K18.7 billion since the bank was privatised in 2008.
Mr Schouten said last year Zanaco declared a dividend of K32.340 billion, which translates into K28 per share from K21 per share in the previous year.
He said Zanaco recorded a profit of K113 billion in 2010, and that the bank is enjoying financial sustainability, which has seen consistent rise in its profits.
“This achievement is a sign of growth in the business and underscores the bank’s commitment to deliver increased value to all its shareholders. This also reaffirms Zanaco’s strong financial performance arising from, among other things, transparent corporate governance policies put in place as well as committed focus by its employees to service customers,” Mr Schouten said.
He said Zanaco continues to be one of the leading banks in Zambia and is committed to banking the unbanked populace of the country.
In line with the bank’s success, Zanaco was recently awarded ‘Best Bank in Zambia 2011’ by Euromoney Awards in Excellence for both its increased profits and lending since privatisation; for successfully developing its franchise in rural areas, increasing branches and automated teller machines, and introducing new services such as mobile branches on trucks and mobile phone banking.
In April 2007, Rabobank acquired a 49 percent stake in Zanaco following the government’s decision to privatize the bank. In 2008 the bank was listed on the Lusaka Stock Exchange, thus successfully concluding one of Zambia’s largest privatisations.