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Bank of Zambia accepts offer to Sale Finance Bank for $5.4 million

By editor
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Bank of Zambia
Bank of Zambia

The Bank of Zambia has revealed that plans are underway for the sale of Finance bank at a price of $5.4 million to South Africa’s FirstRand Group.

The central bank seized Finance Bank from its shareholders in 2010 on reasons of violating the law through unsound practices, including insider borrowing.

The Bank of Zambia has explained in a statement that after negotiations, a deal has been reached for the sale of Finance bank.

FirstRand Group, which trades as FNB, will operate all 34 branches and 16 agencies of Finance Bank, whose employee base is 1,000.

Meanwhile, the Bank of Zambia has agreed to take over Finance Bank’s liabilities, which includes assets embroiled in court litigations.

MUVI TV

editor
editorhttp://www.lusakatimes.com

103 COMMENTS

  1. BOZ, not enough information given on this. Surely a few of us Zambians could have managed to put up money together and buy this out at such a give away price. Its far below the net value of FNB. I have problems with this one big time untill i get to the bottom line.

  2. Does this offer go with all assets around the country? Just 10-20 of us Zambians could have bought this Bank to keep it Zambian.

    • You are surprised!!
      This is the same government you are always blindly worshipping, more deals are yet to come, watch this space!!

  4. 5 million dollars? A bank? Are we reporting this correct? This is not a broke bank. What is going on here? Stop this deal until Parliament reconvenes so that the BOZ governor can explain!

  5. THE SAINT,

    Yes Fundanga has some serious explaination to do if the offer of US $5.4 million is true. But be reminded that the sale of FNB a private entity authorized to operate in the country under statutues of Banking conferred on the Central Bank not subject to parliamentary mandate if found wanting. Its case would be different to that of parastatals. BOZ could invoke its statutory powers to offload this bank on legal grounds or operational reasons but certainly its not the best deal i can endorse if the $5.4 Million offer is real and holding.

  7. This is a major scam.
    These same comedians will then sit on the board and get allowances and loans.

    As long as our big shots continue to sell companies in secret and refuse to offload meaningful percentage of shares on LuSE then such scams will continue to happen

  8. For crying out loud, is this a bank or a ka ntemba? How can a bank possibly go for $5.4 million? This is an outrage. That is why it is important to have complete transparency in the financial dealings of the nation. The Governor of BOZ needs to explain how he arrived at this figure.

  9. $5M for a bank with 36 branches…LOOOL..is FirstRand Group just buying the branches? Are the books that bad?? Due Diligence, Due Diligence …how do journalist let these guys give them half baked information like this!!

  11. $5.4 M??? Is this what they call an empowerment program for Zambians. There are so many Zambians in diaspora who could have bought shares in this bank . Even NAPSA would have bought this bank at that price or at least owned half of it. For a change it would be nice if they tried to let some prominent businesses be Zambian owned.

  12. bloggers, this must be typo. $5.4 is pocket change dont insult zedians caleb.give us a breakdown on how you arrived at this comically ridiculous figure.

  13. With all the assets that Finance Bank has, this is the best that BOZ could do??? Surely, the damaged and dilapidated Building Society House is worth more than Finance Bank????? Are you kidding me????????????

  14. RB and Sons need to be serious. Now for sure im voting for Sata. Finance Bank had over 3 trillion kwacha in deposits, thats more than half a billion dollars. Why wasnt i offered??

  15. $5.4million for a bank? You got to be serious! A Zambian bank goes down due to personal hatred of certain people who fabricated lies and made sure that it goes down. What a shame, we should be proud of Zambian companies not selling for peanuts.

  17. This is NOT a typo people; Bloomberg Bussinessweek was running a similar story…

    FirstRand Unit Buys Finance Bank Zambia for $5.5 MillionSeptember 12, 2011, 12:59 PM EDT
    By Anthony Mukwita and Renee Bonorchis

  18.  Something being Zambian does not mean that it will be effectively run. I support the deal because different banks operating in Zambia will nurture competition to provide better banking services to Zambians; when businesses compete ZAMBIANS WIN.. I support the deal; but i do have issues with the valuation; Finance Bank at 5 million is under valued and on top of that the govt is taking over the liabilities of the bank..  one of my companies building in New York is worth 3 million and its an apartment building.. FINANCE BANK should have been valued far much higher than 5 million. 

  19. $5.4 million divided by 34 branches= $ 158,823.52 per branch.That is so cheap…Honestly, they should have sold the bank to Zambians.

  20. $5 Million??? There must be something wrong with this information. 20 Zambians, if put resources together can buy this bank for $5 Million Dollars. This is not a broke bank. Surely It is not worth $5 Million Dollars.

    • Why don’t you tell your boss that fat thug in State House you blindly support everyday, you foolish MMD blogger, chi RB won’t rest till everything is wiped clean.

  21. It’s really a shame that there’s nothing to show for what was once a vibrant bank serving most of the rural fraternity, the demise of Finance bank set in as soon as it became a political battle field, I know that a lot of us who had accounts with Finance bank did not want the repeat of Meridien Bank and thus had to withdraw our hard earned Kwachas and close our accounts, I’m sure this contributed a lot to the low ranking of the bank. It’s a shame and I hope that the operations of this bank can be effectively revamped; it will need a lot of marketing.

  22. so Finance bank is worth less then my company wage bill for a month…..Last min deals are alway bad….do you remember that FTJ almost sold ndola lime company at the last min for $ 3 milloin.

  23. BOZ can fine Finance bank $10 millions instead of selling it for nothing….come on people, lets come up with a proper solutions, BOZ is now becoming part of the problem not the solution….come 20th Sep, you will see.

  24. $5 million? Tell us that there are no Zambians with $5million who can purchase that bank on cash. What is the commission to RB & Sons LTD, who made sure Mathani is robbed of all his bank?

  26. Surely, one building that finance bank owns at Kamwala costs more than 1.2 millions dollars. How do people at BOZ sell the bank for peanuts and then assume all the liabilities of the bank. These people are saying give us the bank and we will give you $5.5 million dollars; and for that you Zambian take over all the debts of the bank?

    Honestly our country is becoming a banana republic – with such kind of nonsense taking place and the so called politicians are sitting by watching while most of the country’s assets are being taken over by South Africans.

  27. Let us start a people’s revolution and see to it that Fundanga and RB get accountable in court. How can you sell a bank for $5.4m? Finance Bank was not broke. And why do these dogs always want to sell to foreigners when there are Zambians who could have bought shares in it and keep it Zambians. This is why I support uncle Barry across the Zambezi. We shall bring in laws that will compel all companies including banks to own less than 50 percent. Now RB and his BOZ fools have gone too far.

  29. Retirement package for fundanga and RB. That’s what this smells like. Poor Zed. Getting poorer while SouthAfrica booms. Bah Fee Colour! 

  30. The next thing you will hear is that Situmbeko or one of Banda’s sons are the major shareholders in the bank, this is what HH did with the hotels, he sold them for a song and behind the scenes bought them himself. Zambia stinks. For this price, I could have bought this bank myself, for a cash consideration.

  31. All MMD cadres and sympathisers seem to claim something is wrong. There is nothing is wrong wrong with $5.4 because people have been saying it that RB, Kunda & the rest are overseeing systemic corruption in Zambia this is proof of it. Mr Capitalist, Saint, Senior Citizen don’t pretend this is abnormal it’s normal in MMD with your corrpution. How can MMD’s Rupiah sell a bank that is profitable for $5.4 million to FirstRand Group one of the top four banking groups in SA. In case you don’t know SA has four major banks FNB, ABSA, Standard Bank & Nedbank. What a bunch on nutters we have in government. Not surprised if you have a VEEP described as an ill incompetent Pit Bull.

  32. I think there is a lot information missing here. Banks are complex things and the reporting here was probably done a cheap journalist who just wanted to flash the figure than analyse what is behind this, am sure the guys at BOZ will offer further explanations and this was a private Bank and we don’t know how deep the hole it had sunk in.

    I remember during the Asian crisis, one of British longest Bank, called Barings Bank was sold to a Dutch Bank for a nominal sum of £ 1.00, obviously anybody including a toilet cleaner can claim that he could have paid £ 1.00 to own the bank. So the matter is more complex than the figure. I will not comment for now but wait for additional information. Banks are complex systems.

    • Gellout iwe! Ukamba chani? What bank was that that was sold for 1meter? BTW there is no economic crisis here. This is a healthy trading environment. Grown men with your behavior disgust me. Ati Bootlicker! Chopet!

    • Ask yourself why it was sold for £1.00 do a google search then compare it with Finance Bank…then come back here, Its evident that you chaps are quick to defend even when very clear and very blatant!!! 

  34. thats a government at work,at least those who cry out loud have seen what people talk about,lets wait and see proper figures you seem to doubt but this has always happened.

  35. Surely this information is half baked because $5.4 million is a joke especially that BOZ is taking over all the liabilities of Finance Bank. Tax payers are going to pay for the Zambian Airways debt whilst Membe and the Nchito brothers smile. I would love to see Fred Membe criticise this transaction. We are really jokers in Zambia

  36. We wait and see, hopefully we dont see loses of jobs and hopefully we see improved salaries.
    However, the amount of consideration is conspicoiuosly low

  39. For once i agree with MMD Chief Bootlicker. The bank might be worth $200 million dollars and with liabilities amounting to $ 146 million dollars which the Bank of Zambia has agreed to take over since they own Finance bank. so the net worth of the bank is $ 5.4 millon…full stop

  40. This is one deal we should shoot down as Zambians. There is no transparency. There alot of Zambians who would have come up with any amount for Finance Bank. One of RB’s sons has been seen in one of the meetings regarding the same deal. Mahtani may be a crook but some people took advantage of the situation and pulled strings. We shouldn’t be blinded that it is being bought by FNB. 

  41. if you are selling a house for ZMK 500 million and you are owing utillity bills amounting to ZMK 200 million, then you can oly sell the house for 500 – 200 = 300. simple arithimatics bafi kala.

  42. There may not be anything wrong procedurally, but I agree that at this price they should also have given Zambians the opportunity to bid. This smacks of arrogance on the part of BoZ. I would also imagine that RB would have been consulted and perhaps, with the benefit of hindsight, he should have intervened.

    An opportunity lost to empower Zambians.

  43. Fair deal especially that “The Post Newspapers” over borrowed so much money ($40m) to buy Hammers and promote gay and lesbian activities. I think Its a fair deal. Well done MMD led GOVT.

  44. Mwadya Mweka Daddy (MMD) have decampaigned themselves in Urban areas where issues are well articulated and well understood. If transparence was there in evaluating the banks assets and liabilities, Zambians would have teamed up to buy the Finance Bank. RB and Fundanga and Situmbeko know very well that they are retiring this year and given themselves retirement.

  45. I have every reason to believe this information is incorrect. I would rather BOZ shade more light on the matter and believe they soon will.

  46. This is what happens to an institution when you have insider trading and non performing loans. The appearance of such an institution is so may times better than the actual truth behind it. The assets may be so much but if at the same time its liabilites are too much, the net worth plummets to almost nothing if not in the negative. FNB may just be paying for goodwill in this case. BOZ would not have taken over the institution if it complied with financial regulations, this includes capitalisation.

  47. i don’t think we’re seeing the whole story i’ll wait for more news cause 5 million as some one mentioned could be bought by a few people in fact the plots which finance bank branches would be worth more i would have been happy if boz had sold a stack in the bank and at least kept a percentage in zambian hands very disappointing 

  50. Senior Citizen, it is all clear you are not privy to information on this deal. As a matter of fact, if the toxic assets from five borrowers had been included, no amount would even have been paid. FNB takes over most of the liabilities, meet statutory regulatory capital of over 150billion, poor culture of the bank, demotivated staff, staff needing professional training and many more. That price is okay and you are wrong to think that you and afew of your friends have the cash to meet the total requirement to purchase the bank. It is more than the purchase price. I would even give it for free considering the damage Rajan did.

  52. I see most of the bloggers have just focused on the $5.4m. It’s actually the worst bank deal BOZ (BOZA) or is it BANK OF ZAMBIA has made. BOZ is taking over the liabilities. In essence, FNB has just acquired the assets, BOZA and the tax payers will bear the liabilities. What a deal!! And I thought Fundanga is a professional.

  53. They have finally managed to rob Mathani of his prized asset!A lesson to all businessmen in Zed, never be seen to be politically inclined 2 any political party or u will lose ur company. I feel sorry 4 the shareholders who invested so much 2 mek sure the bank grew 2 where it is now!FBZ is more political than business

  54. # 52 Yangu. Good comment. They are THIEVES. BOZ is government owned and survives on tax payers  money. The liabilities are going to be paid by you -ZAMBIANS. Fundanga is another one educated moron raping our resources.

  55. MMD govt has GRABBED the bank from a Zambian and given it to South African!!! Just because Matan supports PF!  Please 20 Sept come quickly before this deal is finalised

  57. #32 MMD Chief Boot licker, you’re talking about a crisis, Zambia and the Bank are not and were not in a crisis, I think you should have not commented in the first place, u’ve just show how****

  58. Nonsense! There is something wrong here. Fundanga surely must explain how they arrived at this price. Who is supposed to make this approval besides BOZ?

  59. @50What makes you think FirstRand Group is going to retain the Finance Bank name, the RSA banks wants to make strategic in-roads into the country.The last thing they would want is being associated to that brand. They have probably bought the profitable side of the business on the cheap, so how does that promote competition when FirstRand is buying below the market price. This is being handled like Finance Bank is in receivership and BOZ are the administrators.Zambians give these “bean counting” Economists at BOZ and MOF too much credit, a grade 7 businessman would have negotiated a better deal than this.If you dig deeper in the FirstRand Group, i wouldn’t be surprised to find out that buffoon RB or his son are major shareholders. Yet again Winners r INVESTORS losers are ZAMBIANS

    • Jonha!I am so sterssed with the paypal thingy. Before you withdraw your funds to your bank, you have to make sure that you already transferred your withdrawal card details to your bank found in your profile area. I failed to do this and my money bounced back deducting 5USD from my account. Total freak!

  63. Senior Citizen. You are agreeing something is really wrong here yet can`t agree with Henry Kyambalesa. How hypocitical can Africans be! Ah well,never mind! Some villagers will vote any way.And, keep it that way. Shhhhhhhhhh!!!!!!!!!!!!!!!!!!!! I won`t say Donchi Kubeba! lol!

  64. I see much of the discourse above is rather emotive. The problem is in part that the reporting is very poor. It gives no information as to the nature of the liabilities (toxic loans I guess), for example, and how BoZ expects to benefit from them. With respect to BoZ I can envision the overwhelming urge to keep FNB afloat and in the process save jobs .

    I am not persuaded by the even sillier comments from some commentators above that they want to become bankers overnight.

    I will give the BoZ the benefit of the doubt until more information is made available to make a more informed judgement.

  65. What a big joke and these are the people we have entrusted our treasury with; Precedence has been set, as a indigenous investor you have no protection, the govt can just wake up one day and grab all your investments just because you dont agree with them on certain issues. What a bunch of crooks, cant wait for 20th Sept. At the rate this govt is going they will even sell state house for K1M.

  66. #1 – Senior citizen, MMD bootlicker and Capitalist – I am so delighted to see that you have exhibited sense for the first time on this blog. I thought I could not live to witness this. This just proves that you cannot cheat common sense, no matter how much you get paid to ignore it.

  67. What was wrong with Finance Bank for it to be repossessed from owners? Was the bank under receivership? how did BOZ arrive at FNB as the bank to take over finance bank? did they allow other banks to bid for the purchase of this Bank? why has it been given at such a low price?

  69. This deal was rotten right from the onset, how can the caretaker be allowed to buy? The caretaker (FNB) obviously understated the value and your so called central bank fell for it. The central bank has enough qualified personnel who could have run the bank in the transition period, FNB were paid huge caretaker fees during the 9 month period, I would not be surprised to learn that the actual price being paid is less than $2m after caretaker fee offset, remember they also paid Delloite and Touch $1m for due diligence, which brings the amount to less than $1m ! What a scam!

  70. Vote RB in and he will take it as a green light to plunder more; no accountability, no transparency, this will be the norm for the next 5 years. In 2016 RB & Sons will be one of the richest people in Africa, and you will be broke mutha£$%%ers.
    Lessons to future Zambia entrepreneurs if you want to succeed in Zambia, keep your company’s books squeaky clean and stay the hell away from politics!!! 

  71. That’s MMD for you. Selling cheaply RBish and company have made from this. Vote this corrupt Govt out. All you who keep supporting this son of a dog just look at what he’s doing… WAKE UP.. What more if he stays in power? Vote this ugly RoBber out……

  73. A lATEST opinion poll conducted by a group of Zambian lecturers in conjunction with Canada’s Bradford University has revealed that Michael Sata’s Patriotic Front (PF) will win this year’s elections by 55 per cent.

  74. The bank has been sold cheaply.For example if one branch is worth k2 billion($400,000(RATE 1$=K5000) Multipied by 36 =us$14,400,000.These are branches only.If you add 16 agencies at a cost of K500,000,000 each we are getting k8billion(us$1,600,000).The bank in total is worth =us$16million.So us$5.4million is a very cheap prize.

    • Tomato you calculations are taking into account the fact that First Rand is also buying the Liabilities of the bank. to use a simple example that someone referred to earlier.. if your house is worth K400m and there Unpaid utility bills of K350million, how much will a willing buyer in an open market pay for it ? a) 400 million b) K50 million or C) K350million

  76. • Kagiso Trust Investments (KTI) has bought an investment stake in the Universal Print Group (Pty) Ltd, the printer of 2011 ballot.
    • Some First National Bank (FNB) directors are also directors at UPG printers

    • First National Bank has taken over Finance Bank Zambia, two weeks before elections
    • What is the connection between Kagiso Trust, FNB, UPG and Zambians elections 2011?

    • Kagiso Trust Investments (KTI) has bought an investment stake in the Universal Print Group (Pty) Ltd, the printer of 2011 ballot.
      • Some First National Bank (FNB) directors are also directors at Kagiso Trust who owns a stake in UPG printers

      • First National Bank has taken over Finance Bank Zambia, two weeks before elections
      • What is the connection between Kagiso Trust, FNB, UPG and Zambians elections 2011?

  77. HEY, I AM SOOOOO DISGUSTED….. U REMEMBER WHEN THE POST SAID THAT RBSIH & SONS INTENDED TO SALE FBZ BEFORE ELECTIONS SO AS TO KEEP MAHTANI OUT OF ITS REACH EVEN IF HE LOSES THESE ELECTIONS IS TRUE….. NIPA ZED EISH… Fundanga,(BOZ) Kabonde,(ZP) Mupeso(ZNBC), Kayukwa(ACC), Lopa( Army), Mupwaya(ZESCO) and many more Morons your days are numbered come 23rd September. Nachilabako na Chanda Chimbwi, Gregory Chifire, Siulapwa, Mwendapole and Lifwekelo….

  78. Atase! It seems we never learn pa Zambia! That is the cost of one building! We sold Zambia Chipubaah Caonaula Maini (ZCCM) for a song and we are now selling Finance Bank for peanuts! Give it back to the owner Mathani, please! Why can’t we learn from past mistakes?

  79. Where is Independent Observer on this issue. We need some one to share the light on how these things are done. I do not believe this bank was worth $5.5m

  82. No. 6 Mwiponta Mukabwela I completely agree with you! In fact when I first saw the first comment, I said to myself “What!” Then I saw 2nd comment I told myself there is something wrong here! It was only when I read comment no 5 that I realised what this tramps position was- he has always been againt Fundanga and this chap (Senior Citizen) was behind the rumours that CF had been fired! Anyway, I have written to the Governor and you may all be able to write to him (cfundanda dot zed em
    I am disappointed to read that BoZ has again decided to sell Finance Bank to Foreigners rather than consider Zambians who would like to seize such opportunities.
    As a Zambian Nation, I am disgusted that even as we approach elections, BoZ arbitrarily decides to offload.

  83. The truth is that only we in the blog society will see things much clearer being in the outside! I hope we (so called Kaponyas- among the many names we have been called as a PF blogger) shall not be working like MMD current bloggers and support themselves into a brick wall! Personally, I will not be supporting unworkable policies of the new PF Government! At least I know I shall rebel! What we now need to do is take stock of what MMD have achieved and what PF can do different (not what they did to KK) a complete SWOT analysis and continue! It is easy to say people will have money in their pockets but we must ask the big questions: Is it for 3 months only or the last 3 months of the term? MMD showed us in the last 3 months that government can work when prodded!

  84. Even Obama is begging the opposition today for Senate agreeing to his fiscal plan! In the UK the young man Cameron anticipated less dissent by bringing his older brother Nick leaving the eldest brother Gordon (as he had taken his wee bit (as the Brits would) Chief Bootlicker Change is coming indeed!

  86. lets wait for details to be availed, the false valuations and assumptions we are seeing above wont take anyone anywhere. Decisions are made after information has been gathered and available options looked into, several factors need to be considered. You dont judge based on a newspaper article because we know how biased the zed press is(both public and private). You dont expect the article above to say Napsa rejected a proposal to invest in the bank, napsa would reject if they think the bank’s net worth was nothing to write home about. FBZL thought they could risk depositer funds and get away with it, had FBZL gone down, most people against the sale would have blamed BOZ as the regulator for not stepping in and wondered what it’s role is. I think BOZ were being proactive in this case.

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