Barclays Bank Plc said it plans to complete by the end of the third quarter the sale of its majority stake in Barclays Bank of Zimbabwe Ltd. to First Merchant Bank Ltd., confirming earlier reports that it has agreed to sell the business to the Malawi-based lender.
As part of the agreement, Barclays Bank will sell shares in Afcarme Zimbabwe Holdings (Pvt) Ltd., the holding company of Barclays Bank of Zimbabwe.
Financial terms of the transaction were not disclosed.
All 700 employees, 25 retail branches and five corporate service centers of Barclays Bank of Zimbabwe will become part of the FMB group on completion of the deal, which is subject to regulatory approvals. The transaction paves the way for FMB's debut in Zimbabwe.
Barclays expects the transaction to result in a £292 million reduction in risk weighted assets.
"I am pleased to say following today's announcement, all of the operating businesses put into Barclays noncore are now either under new ownership or soon will be," Harry Harrison, head of Barclays Plc's noncore division, said, adding that the group remains focused on closing the noncore division by June 30.
First Merchant Bank disclosed in March that it was in exclusive negotiations to acquire Barclays Bank of Zimbabwe, in which Barclays Bank holds a 67.68% stake. The bank also said then that three of its principal shareholders, collectively representing 55% of its issued capital, intended to transfer their shares to FMB Capital Holdings Plc, which would subsequently make an offer to acquire the remaining 45% of First Merchant Bank. Following completion of the transaction, FMB Capital Holdings shares will be listed on the Malawi Stock Exchange and First Merchant Bank shares will be delisted.