Business

Access Bank buys Zambia’s Cavmont Bank

Access Bank Plc, through its Zambian subsidiary, has agreed to acquire Cavmont Bank Ltd, a subsidiary of Cavmont Capital Holdings Zambia Plc, The disclosure was made in a notification sent to the Nigerian Stock Exchange (NSE) by Access Bank yesterday.

The statement said that the deal is a highly complementary transaction, which combines Access Bank Zambia’s wholesale and trade finance capabilities with Cavmont Bank’s retail and commercial banking operations. Customers from the enlarged bank are expected to benefit from greater security offered by what will be one of the most capitalised banks in Zambia with a more diversified product and service offering and a broader geographical footprint and infrastructure. According to Reuters, Access Bank Zambia had agreed to buy Cavmont Capital Holdings, the Zambian arm of Namibian financial services group Capricorn, for a nominal fee of one kwacha ($0.0014).

The news agency stated that the Namibian entity owns 98.03 per cent of Cavmont Capital Holdings, which owns 100 percent of loss-making Cavmont Bank, adding that under the terms of the deal, Access Bank Zambia will acquire the entire issued ordinary share capital, assets and liabilities of Cavmont Bank.

It reported Capricorn as saying that it has agreed to reinvest 300 million kwacha into the new entity as part of the agreement. Cavmont Bank recorded a loss after tax of 19.8 million Namibian dollars ($1.14 million) in 2019, an improvement on a 46.6 million Namibian dollar loss the previous financial year. “This merger, which will see the combined bank becoming a top 10 bank in Zambia, will increase our scale and improve our operating leverage by enabling us to deliver our existing retail and wholesale offerings to a wider base of customers,” Access Bank Zambia Managing Director Joana Bannerman said.

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