Ecobank buys into Premier Finance Group

By Nelson Banya

HARARE (Reuters) – Pan-African banking group Ecobank Transnational Inc has become Zimbabwean bank Premier Finance Group’s biggest shareholder following a $10 million capital injection.

Premier, which operates a merchant bank and asset management firm, said on Thursday the Ecobank deal, which needs regulatory approval, would help it meet a year-end deadline for capital requirements.

Zimbabwe’s central bank has set minimum capital requirements for commercial banks at $12.5 million, $10 million for merchant banks, and $2.5 million for asset managers.

While the economy has stabilised since President Robert Mugabe agreed last year to share power with his rival, Prime Minister Morgan Tsvangirai, banks are battling liquidity shortages and have sought foreign cash to recapitalise operations.

Premier, with assets worth $37 million at the end of June, is one of the smaller banks in Zimbabwe. It suffered a $4 million loss in the six months to end-June, hit by restructuring costs.

Togo-incorporated Ecobank is listed in Lagos, Ghana and on the West African regional bourse. It has assets worth $9 billion and operates in 30 countries on the continent.