AfrAsia exit leaves Kingdom without a king

AfrAsia exit leaves Kingdom without a king

By Bernard Mpofu, HARARE, February 24 (The Source) – Troubled AfrAsia Zimbabwe Holdings limited majority shareholder, Mauritius incorporated AfrAsia Bank Limited has decided to exit Zimbabwe, triggering a series of events that culminated in the local financial services group surrendering its banking licence on Tuesday, The Source has established.

The development also leaves the group’s two other units – microfinance firm MicroKing, which had already been put up for sale, and asset manager AfrAsia Capital Management (ACM) facing an uncertain future.

Zimbabwe’s central bank announced it had cancelled the former Kingdom Bank’s licence after its shareholders gave it up on Tuesday. The bank has gone under provisional liquidation to protect its assets from foreclosure.

An internal memo circulated among AfrAsia Zimbabwe Holdings employees announced the anchor shareholder’s decision to divest from Zimbabwe, despite restating its commitment to the investment just last October.

“ABL made a strategic decision to exit Zimbabwe and they will be issuing a statement to that effect. As subsidiaries of the bank, MicroKing and ACM are also affected,” the company said in an internal memo dated February 24.

“We anticipate this (provisional liquidation) to be for three months. As you know, the group is in advanced discussions with a potential investor. These discussions are ongoing.”

The closure of AfrAsia Bank, the second such licence cancellation in as many months following Allied Bank, comes after the Mauritian-registered AfrAsia had invested in excess of $30 million in a bid to revive the former Kingdom Bank.

An October 31 2014 statement by AfrAsia Bank Limited chief executive James Benoit expressed the group’s commitment to its Zimbabwean business and the country’s economy.

“The AfrAsia franchise is committed to Zimbabwe. Despite having inherited an important non-performing loan situation, we heavily invested – nearly USD30 million in capital,” Benoit said.

“We have faith in the economy and the country, and we shall continue to pursue avenues to grow our business. We are confident that with our strong foothold in Africa, as well as our track record in the region, we shall create a strong share value for our investors.”

The cancellation of AfrAsia Bank’s licence marks the brutal end of yet another black-created institution born out of Zimbabwe’s 1990s liberalisation of its economy.

Along with the NMB group, the defunct Trust and ABC Holdings, which was recently taken over by former Barclays Plc chief executive Bob Diamond’s Atlas Mara in a $265 million deal, the Kingdom Financial Holdings group was every bit part of successful locally-owned banking businesses.

AfrAsia Bank Mauritius took control of Kingdom Financial Holdings in 2013 after buying out founder Nigel Chanakira and renaming it AfrAsia Zimbabwe Holdings. The flagship banking unit changed its name from Kingdom Bank to AfrAsia Bank Ltd and had 12 branches countrywide.

Its closure is expected to affect over 300 jobs.