Econet rebrands its Zimbabwean bank

By Tawanda Karombo

HARARE — Strive Masiyiwa, a Zimbabwean businessman, is consolidating his interests in the banking sector after his telecommunications company, Econet Wireless, invested $75.1m in a Zimbabwean commercial bank, of which it now has control. 

Econet now owns 100% of TN Bank after buying out former chairman Tawanda Nyambirai’s shares. The bank was rebranded on Wednesday as Steward Bank.

Mr Nyambirai, who helped Mr Masiyiwa surmount legal hurdles to secure an operating licence for Econet, has also since relinquished his post as chairman of Econet Wireless.

Steward Bank is headed by Kwanele Ngwenya, a South African national, and is expected to advance Econet’s bid to integrate banking and telecommunications. Mr Ngwenya said on Wednesday that the bank now had a solid capital base.

“Steward Bank was capitalised at $75.1m. This is well above Reserve Bank of Zimbabwe minimum requirements and means we have become one of the best capitalised banks in Zimbabwe,” he said.

The reserve bank has hiked statutory capital requirements for Zimbabwean commercial banks to $100m although this will be staggered over the years to 2020. The central bank had set a June 30 deadline for the commercial banks to have statutory capitalisation of not less than $50m.

Steward Bank, thanks to the money poured in by Econet Wireless, is well above the central bank’s requirements.

Mr Ngwenya said Steward Bank, which has since delisted from the Zimbabwe Stock Exchange, will “take advantage of the telecommunications system of Econet” to establish an integrated presence in banking and telecommunications. “We will use the technology we have in the group to advance and reach as many clients as we can,” he said.

Johannes Kwangwari, an analyst, told Business Day on Wednesday that Steward Bank had the solid backing of Econet, which already has a firm presence in the telecommunications and financial services sector through its mobile network and mobile money transfer operations.

“It’s likely to be one of the fastest growing banks in the country. Their task is easy because they can easily access capital from Econet, which is a massive cash generator, and the close ties they have, through the planned integration of banking and telecommunications, will provide further impetus and opportunities for quicker growth,” he said.

The company has 8-million subscribers on its network while its EcoCash mobile money product has 2-million users.

Econet said in May that earnings before interest, tax, depreciation and amortisation (Ebitda) for the period to end February had quickened by 5% to $305.3m against a stronger Ebitda margin of 44%. Depreciation and amortisation increased by 54% to $71.6m in line with growth in the company’s asset base.

Steward Bank will bring competition to established commercial banks such as South African-owned Stanbic, MBCA, and international banks Barclays and Standard Chartered. Other big banks include CBZ Bank, FBC Bank, ZB Bank and NMB Bank. Business Day