Finance Bank Footprint across Zambia
Finance Bank Footprint across Zambia

Zambia Union of Financial and Allied Workers is satisfied with assurances that Finance Bank employees will retain their jobs after the sale of the company.

The Bank of Zambia has announced a 27 billion Kwacha sale of Finance bank to FirstRand Group of the South Africa.

ZUFIAW President Cephas Mukuka said that a tripartite meeting for the central bank, FNB and ZUFIAW officials agreed on a non-laying off plan for all employees.

Mr Mukuka has further expressed optimism of good results with the sale of Finance Bank as was the case with ZANACO.

And Commenting on jobs, FNB chief executive officer Sarel Van Zyl said as part of the condition, the bank will not cut any jobs, but will instead make job offers for those employees that intend to work for the bank.

He said employees taking  job offers will have to work on new contracts. Mr Van Zyl, however, said the bank will pay off terminal benefits to employees

On Monday Bank of Zambia (BoZ) announced the takeover of the troubled Finance Bank Zambia Limited by First National Bank Limited of South Africa nine months after the central bank took over running of the bank.

Bank of Zambia Governor Caleb Fundanga said that FNB Zambia fended off competition from five local and international banks to assume the running of Zambia’s fifth largest bank at a cost of K27 billion.

Bank of Zambia Governor Caleb Fundanga said that FNB Zambia fended off competition from five local and international banks to assume the running of Zambia’s fifth largest bank at a cost of K27 billion.

Dr Fundanga said the decision by BoZ to award FNB the running of Finance Bank was within the central bank’s statutory powers under the Banking and Financial Services Act (BFSA).

He said BoZ followed the transfer procedure to the book, and that the renowned international financial institution Deloitte LLP of London was engaged to oversee the transfer process.

“The Bank of Zambia is pleased to announce that in terms of restructuring programme implemented pursuant to section 84B (a) of the BFSA, the Bank of Zambian has agreed to the acquisition by First National Bank Zambia of selected assets and liabilities of Finance Bank Zambia Limited,” he said. Dr Fundanga said the acquisition would bring sound business practices, financial stability and protect the local financial system as well as protect the depositor base of Finance Bank Zambia, which was grossly abused.

He said BoZ was also interested in maintaining employment of bank staff and maintaining the well-distributed bank network coverage. He said Deloitte advised BoZ of the competing interests which saw FNB Zambia, a subsidiary of First Rand Limited of South Africa, beat First Alliance Bank Zambia, Exim Bank of Tanzania, I&M Bank from Kenya and two other South African banks – JM Capital and Quantile Capital.

He said BoZ followed the transfer procedure to the book, and that the renowned international financial institution Deloitte LLP of London was engaged to oversee the transfer process.

On December 10 last year, BoZ took over the running of Finance Bank Zambia after it was discovered that the commercial bank was breaching several banking rules, including risking of deposits and breaching loan granting limits.

Dr Fundanga said FNB was taking over 96 per cent of what Finance Bank Zambia owned, leaving four per cent of the toxic assets and liabilities which were either in court or in form of bad loans on the Finance Bank books to the central bank. With this acquisition, FNB would take over all 34 Finance Bank Zambia branches, 16 agencies and 61 automated teller machines (ATMs) in all the nine provinces of Zambia.

Dr Fundanga said FNB was taking over 96 per cent of what Finance Bank Zambia owned, leaving four per cent of the toxic assets and liabilities which were either in court or in form of bad loans on the Finance Bank books to the central bank.

“The restructuring of Finance Bank, implemented as a purchase and assumption transaction, involves FNB Zambia purchasing certain assets and assuming certain liabilities”. Accordingly, FNB Zambia will operate all the 34 branches, 16 agencies and 61 ATMs currently serviced by Finance Bank,” he said.

And  First  National Bank Zambia Limited (FNBZ) is to inject over 100 million rands (about K70 billion) in the operation of Finance Bank Zambia Limited (FBZL) after the acquisition of the bank.

FNB CEO Sarel Van Zyl said there is need for the bank to capitalise the newly acquired bank according to BoZ conditions and regulations.

Mr Van Zyl said investing in infrastructure is substantial since the bank needs to conduct a detailed assessment.

“We could be investing a 100 million rands or more on physical infrastructure, electronic data system and changing the entire image,” he said.

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46 COMMENTS

  1. Offering employees new contracts is one thing, but who is going to pay dues FBZ employess have worked for over the years? The bank was sold at a song it is only fair employees are paid their money.

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  2. The acquisition of Finance Bank has clipped Crooks and the Post who drew money from the bank without hindrancein disguised thefts. And this also acoounts for the Post’s Mmembe anger at the government. More poverty to be experienced.

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  3. SUMMARY CAPTION FROM THE UPND MANIFESTO:. Targeted economic growth rate of 10%. Capacity Building wherever need be. High but sustainable economic growth. Good planning and Prudent management. Overall poverty reduction, within a decade. Conclusion of negotiated agreements within six (rather than 36)months. Significant improvement of Zambia’s Business climate. Process RAW materials and increase Zambian Exports. Cut Bureaucracy and foster work attitude change. Promote the Public/Private/NGO Partnerships. Run an open GRZ, with a BUILDING BLOCK APPROACH to Governance. Realise our national shared dream in Constitutionalism & Democracy. Improve nutrition for all citizens. Increase support to Agro and Scientific Research Institutions. Improve vet services, livestock and fisheries. 

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  4. UPND MANIFESTO CONTD..
    – Improve and maximize support to extension services. Modernise Meteorological services. Reforest and avoid deforestation; prevent soil erosion. Promote Agro processing Industries. Improve the rural and Urban transport network. Provide Free Education to College/University level to the poor. Render Free Health Care to the poor. Promote establishment of local High Quality Private Health to avoid sending Zambians for treatment abroad. Establish affordable Medical Schemes and Insurance. Improve Land Use Planning, Management and delivery system. Effectively enforce Labour Laws and improve Investment Relations. Create Jobs. Depoliticise and Professionalize the Civil SAervice. Improve Salaries and Conditions of Service for Public Service Workers

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  5. UPND MANIFESTO CONTD,,
    . Ensure fair and balanced corporate TAXES, and lower personal taxes. Increase the TAX FREE INCOME BAND to a level above the basic food basket cost for an average household of six.. Ensure sustainable Pension Schemes and timely pay of benefits. .Introduce Social Support Schemes for the old, orphaned child and differently abled citizens. Supply CLEAN WATER TO ALL. IMPROVE SANITATION FOR ALL. Provide appropriate HOUSING FOR ALL. Promote cheaper business loan schemes and prioritise access to trading places. Ensure that Zambians own shares and businesses in Mining and other Companies in their own right or thru JOINT VENTURES. Restructure Precious and Semi-precious mining sub – sector. 

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  6. UPND MANIFESTO CONTD,,
    . Provide free carry share, profit shares, yearly grant funds to communities, where mining is located, thru COMMUNITY DEVELOPMENT TRUSTS. Improve safety standards in mines and other industries. Implement Internationally accepted standards in Environmental managemet. Ensure that the Mining Companies adopt appropriate social responsibilities. Resolve the ENERGY CRISIS by building new hydro power stations. Promote SOLAR and WIND energy sources. Capacity build local administrations. Increase the CDF to more than K4 billion per Constituency. Pay Gratuity to Councillors. Provide each District with a Water Drilling Machine, Bulldozer and Grader

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  7. UPND MANIFESTO CONTD,,

    . Work closely with Traditional Leaders. IMPROVE TOWN and COUNTRY PLANNING. IMPROVE CAPACITIES FOR POLICIES IMPLEMENTATION, MONITORING & EVALUATION…VOTE HH, VOTE UPND

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  8. In this report, it is very clear that the new owners will pay off benefits to employees. The new job offers entails that some employees may want to leave after they are paid off but those that would want to continue will be engaged on new terms & conditions which, if not acceptable, can be rejected. Otherwise this Bank was headed for a fall and all the 1000 employees should have been on the streets by now. Remember in 2003 when this bank almost collapsed and there was a near run on Finance bank

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  9. This new arrangement will almost certainy cut off the vultures that substantially would have celebrated if the bank had collapsed as that would have left them in the clouds of debtors basically difficult to pursue. This time around, BOZ will be the ones to collect the debt under the 4% obligation. What a turn of events!

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  10. Now GRZ can safely collect the K25billion from membe while keeping the 1000 people in employment. Thats what we call good governance!

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  11. I meant the acquisition and the terms and conditions sound reasonable after mch thought!that bank was really goin down and it’s been redeemed by the able leadership of yours truly HERB and the mmd!

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  12. 3 months contracts and 3 months probation after working for FBZ for 10 years, wait imwe ba chimbwi mwalalila like ZAMTEL or E.T.C  Mpongwe farms after selling the Farm to ZAMBEEF

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  13. So who gets the proceeds of the sale? – GRZ through BOZ? Do the original shareholders whom the bank was repossessed from get anything at all… maybe after settlment of whatever it is they owed FBZ? Please someone enlighten me on how all this works out because I still think it is not a just settlement for the shareholders whom the bank was repossessed from.

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  14. Membe knows he is in hot soup with his vuvuzela for the PF the Post his little paper for puppets as is his fatso lawyer…30billion and counting plus they pledged personal collateral chaka chino wina alila

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  15. NO MATTER WHAT HAPPENS SATA IS WINNING THIS YEARS ELECTIONS. NO AMOUNT OF RIGGING WILL PREVENT HIM FROM WINNING.THOSE OF US THINKING MMD WILL RIG, FORGET!!. THE NUMBER OF VOTERS WHO WILL VOTE FOR SATA IN WESTERN ESP.MONGU, CHONGWE(ONE THE BIGGEST CONST),SOLWEZI AND THE ENTIRE LUAPULA PROVINCE WILL BE TOO MUCH FOR MMD TO RIG. WHERE ARE THEY GOING TO GET REGISTERED VOTERS BCOZ THE REGISTER IS FIXED. THIS YEAR YOU WILL SEE HOW POWERFUL PEOPLE CAN BE. WAIT AND SEE. 

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  16. sounds reasonably fnb is the biggest of the banks that put up applications and given they 1000 jobs can be retained and the union is happy ,bt. they still shouldn’t have sold 100% of the bank even if 20% was held in zambian hands i would have been happy 

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  17. Now that Govt through BOZ has taken over the toxic assets and liabilities of FBZ it must aggressively pursue those that borrowed recklessly. This is not politking BOZ should take on those institutions and individuals that took advantage of their connections to the ex directors to borrow beyond their capacity to repay.

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  18. Don’t be fooled……………….. offering you jobs and being accepted are two different issues.
    Say bye to some of your fellow employees…… Remember ZANACO,ZAMTEL…..

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  19. Today i woke up and realised that MMD are going to lose the elections in a couple of days.

    My party are just a bunch of losers who keep stealing funds from GRZ to line their family pockets.
    Mr Kavindele always stated there was too much corruption in the Banda family and now i can finally see the madness involved by R.B and his sons.

    I will vote for SATA this year so that i can go to heaven a truthful man.
    Today im going to church to admit my sins of lying everyday on Zambian forums.

    MMD have been in power for too long and i do not want to die a liar.

    VOTE SATA……REMOVE RUPIAH AT ALL COSTS.

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  20. The law does not allow reduction in emmoluments, the worst deal these guys can get is to continue at the current salary. The good part is that they will be entitled to gratuity every so may years if the new contracts are fixed term contracts. No point working for a company for 10 years and only get paid leave days when you resign. People should learn to move on in life, 15 years in one company as if your father owns it???? hallo!!! You climb the ladder by getting different experiences in different companys, not being known to have memorised the ledger account codes due to long stay!!!!!!

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  21. You don’t have to be too emotional about things. This issue will effectively be dealt with on the 20th of September. Don’t just show emotion, ensure you vote otherwise you are the people who will cause unrest due to shck.

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  22. Shareholders overborrowed without capacity and due regard for depositors and according to the Banking & Financial Services Act, BOZ is empowered to intervene coz at this stage, much of the Bank belong to stakeholders (depositors) whose interest needs protection from abusive shareholders. So the K25 bn + interest to be collected from the membes is for the public and therefore GRZ knows what to do with public resources.

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  23. So who is stealing from the public? The one who borrows dubiously without plans to pay back and preaches fight against corruption or the one who takes money from such gangs back into public coffers?

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  24. My party created false evidence and then steals a bank and sells it for pennies.
    I do hope that i dont change my mind in months from now and say it was sold for a song like all the other business sold by MMD.

    I can never keep once stance.
    I like to follow my parrots above who feed me to survive.

    I apologise for all my lies over the years.
    My sins are bigger than my party.

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  25. # 21 Linsy: Since everyone will be paid off in full for the whole period saved, there will be no other emoluments expected except that those that would want to continue will have to re-employed by the new company. FBZ will completely be rebranded and all those with idle mentality will either be screened out or fit into what the new owners will prescribe.

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  26. It is anticipated that FNB will offload some of the shares to the public after reorganisation like what hapenned with zanaco. Other wise there is no cause for zambians to worry, just keep the money. After elections most of these multinationals will float shares on luse and as a zambian you can participate in the running of business in the country.

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  27. Of course Zambia Union of Financial and Allied Workers is going to support any sale even if it was for $2 so long as its members are not on the streets.
    What everyone doesn’t understand is the coded Corporate language being employed here, if i buy a company and then invite former employees to renew contracts; what’s stopping me rejecting some based on age, efficiency, cost cutting in some branches. If you locked 12 years at the bank that accounts for nothing no handshake. 
    Lets not sugar coat the amount by stating that First  National Bank acquired the bank for K27Billion making it sound like its a massive amount when we are know it bought it for a paltry $5million that includes purchasing certain selected profitable assets and assuming certain liabilities.

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  28. Its all good and very pleasing to ear to utter statements like “FNB Zambia fended off competition from five local and international banks to assume the running of Zambia’s fifth largest bank at a cost of K27” why don’t you go a step further and elaborate on what FNB was offering that the other “international banks” were not. We don’t need to know the names of the other banks, is it asking too much for a little transparency and accountability to the tax payer since is taking over the bad debts and the rest of Finance Bank’s fleas.

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  29. My friend, give your emotions a rest. There was a bid and FNB won that bid. I hazard a guess that the bank was worthless and FNB is merely paying for goodwill and potential future profits that are only likely because of the R100m they are investing in the bank. If you must point fingers please ask Mathani, Mmembe and the other shareholders who cheated depositors. The BoZ have put any doubters to shame on this one, Congrats to BoZ. The trouble with people like you is that you have to comment even on matters you least understand. A

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  30. In Africa we still hold these Global Financial Institutions like “the renowned international financial institution Deloitte LLP of London” in very high regard. Have you ever thought for a minute that these selfsame companies have Global companies like banks, Mining Conglomerates etc on their clients books, remember back in 90s when these selfsame companies were carrying out valuations for Privatisation on our mines…some of these chaps were telling us the only enough copper to last 25 years down there; hello we are still here and there is now copper to last 25+ years down there. Who do you think was benefiting from that information?? Sometimes a little common sense is all that is needed when carrying out these negotiations…

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  31. @32My guy If i don’t understand then your BOZ Governor has NOT done enough to make me understand, its your selfsame inferiority complex mentality that has infected our Journalists that they are unable to probe these “bean counting” economists at BOZ and Finance when the ply them utter economic jargon as they are afraid to expose their ignorance.BUT guess what? its $5m okay to be ignorant and then ask questions… than just sit there stupidly pretending to understand.Like I always say as a businessman, give a economist to sale a company and this is the B.S crap you get, give a businessman and he/she will strive to get the best deal for his shareholders.

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  32. The consoling thing is that the fraudstars are completely out of the game. Mind you this is not a GRZ property but a public one. So GRZ has played its part. Next, GRZ will retrieve what ever money is still in the hands of these crooks on behalf of the people.

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  33. Now that the deal has been explained, I see it in new light. The other days story was half baked. This one, with additional information shows how professional BOZ is run. This now makes sense.

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  34. If FBZ has been sold to a competent company would it not be wise for BOZ to ensure pension funds like NAPSA own at least 20% in the FBZ deal. Economists know it is best to buy shares when they are low. A bank as big & already established like FBZ will grow and bounce back with the right investment and governance. Selling it to South Africans maybe the only solution to this… but BOZ should have found a way for pension funds to have a little piece of the pie. Providing employment isn’t enough the govt needs to find a way for the Zed people’s revenue to grow. Selling big businesses 100% at a low price is worrying when the Zed people aren’t given the opportunity to invest even 20%. Zed really needs a 401K system like America if most companies in Zed will not be owned by Zambians.

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  35. Morons the 27B is what remained after liabilities were paid – this just proves the state of solvency the bank was at under MAHTANI the frog and his goons.

    I love it win a battle is won.

    MAHTANI serves you right and I told you it was coming. You are just arrogant. 

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  36. Are you so illiterate that you can not see that you as Zambians have gained in the short-run, but lost in the long-term? FNB’s acquisition of FBZ adds to the value of South Africa and takes away from the value of Zambia. Are you so blind that you can not see that this is a personal thing against Mahtani? Who built the bank? who created so many jobs for Zambians and gave Zambians an opportunity to success? Continue in your short-mindedness and continue to be second class citizens. 5million for a 350million bank? really? Zambians you are ok with this? dont be daft! you have lost out! FBZ was grabbed on the pretenses that it was insolvent and the laws used are for the same, but the bank is still strong. go ahead and become slaves for the South Africans.

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  37. @ 41
    Sadly too many traditional thinkers in Zed with paralysed mind sets, there is lack of creative thinkers who are progressive, innovative, entrepreneurial and future oriented….that CEO chap from FNB said  “We COULD be investing a 100 million Rands or more on ….” what guaranteed is there that they will even do it, why could? when they were running the bank all along…why not something definite when you bought the bank on the cheap with branches in all corners of the country and international presence. What guarantees are there that the won’t close some branches??
    Some Billionaire “fat cat” Boer in some tax heaven in paradise is probably rubbing his hands with glee.. this minute..laughing at the stupid kaffirs!! 
    Utterly disgusted!! 

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  38. This statement in the press that FNB will be paying terminal benefits to FBZ is wrong, and the man was misquoted. How can FNB pay off benefits to people who were not their employees. It is FBZ and BOZ to pay off these dues. On the issue that Zambians should have bought this bank was it not a locally owned bank run by Zambians and few muzungus? I think we should hear from the FBZ employees themselves and what they have been going through over the years as their bosses drove big fancy cars and gave themselves loans that they failed to repay and which were subsequently written.

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  39. WHAT IS THE VALUE OF THE 48 BRANCHES? LESS THAN K 27 BILLION? ARE WE SURE WE ARE NOT MAKING A LOSS? “Agony is to work so very hard to bring you company to high standards & employ some Zambians and further decide to sale some shares to others so that you share risks, then instead of other people advising on the good corporate governance tenets, they decide to grab your company which you ALONE sweated for? What a earth, no wonder at death things of the world do not matter and people cry to ‘GOD’ because He is the true savior. Notwithstanding this, there are lessons to be learnt. 

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