Home | News | FNB SELLING 20% SHARES

FNB SELLING 20% SHARES

22/06/2018 23:52:00 BY KWANELE DHLADHLA

Font size:

EZULWINI – First National Bank (FNB) has made a statement of intent to dispose of 20 per cent shares through a listing in the Swaziland Stock Exchange (SSX).

Arguably the most technology advanced bank in the Kingdom of Eswatini, which circulates E40 billion online transactions annually, has commenced a process to sell the shares in a transaction it believes will drive long term benefits for the financial institution and the country.

The objective is to achieve a broad-based local shareholding and empower a large group of emaSwati, including staff of FNB Swaziland.
The transaction, expected to be concluded before the end of 2018 subject to regulatory approvals, will be facilitated through the sale of a portion of its shareholding by parent company FirstRand Limited, one of Africa’s largest financial services groups listed in the Johannesburg Stock Exchange (JSE).

The detailed criterion, qualification process and share price is expected to be released in September soon after commencement of the bank’s financial year which begins in July 1, 2018.

FirstRand Limited’s Samantha Baldson explained that acquisition of the shares would be open to every sector of society including individuals, companies, pension funds cooperatives and all interested parties.

She appealed to local brokers to also assist potential investors as they decide on whether to tap into the investment opportunity availed by the bank which opened shop in the kingdom in 1995. “We will receive bids from interested investors and then do an allocation on the basis of achieving a broad based local shareholding,” said Baldson during the shareholding unveiling ceremony convened at Royal Villas yesterday.

Outlining what had informed the decision to sell a stake of the 100 per cent Firstrand owned institution, Chairperson of the FNB Swaziland Board of Directors Joseph Ndlangamandla, said as a bank they frequently and consistently stand in front of the mirror and ask themselves how they could do better, what would be the next big thing in banking and how they could create the edge needed to compete successfully.

The experienced banker enunciated that in asking some of the above questions over the last few years, one of the obvious ones had been whether the bank was mature enough to accommodate a group of local shareholders without disrupting the business.
Ndlangamandla disclosed that the answer at first had been maybe. However, they first needed to understand long-term growth projections for the economy.

In continuing to ask themselves questions bordering on how to improve their service provision, Ndlangamandla said they eventually came up with a different answer to the question of the shareholding localisation.

“We have been doing groundwork to help give birth to this local shareholding dream, including engagements with government and the investor community. The business is strong and has shown maturity and enduring stability. The time is now, FNB will formally start the identification process of shareholders who are emaSwati.”

Commenting on the latest development, FNB Swaziland Chief Executive Officer, Dennis Mbingo said as a bank they were extremely proud of the heritage of Eswatini especially this year when the country also celebrated 50 years of independence.
He narrated that FNB has been servicing the people of Eswatini for 23 years and was able to deliver significant profit growth which stood at E238 million before taxation in 2017.

“By offering this opportunity for a broader grouping of Eswatini individuals and institutions to participate in our ongoing success, we can continue to create greater value on a sustainable basis. It underpins our commitment to deliver even better service excellence to our customers and meaningful value creation for all our stakeholders,” said Mbingo.

Melvin Mkhomo, who represented Governor of the Central Bank of Eswatini (CBE) Majozi Sithole, said the regulator notes the approach FNB has taken towards its proposed localisation. He pointed out that the strategic intent to empower emaSwati was appreciated and applauded.

“Congratulations to the board and management of FNB. We will offer full support of CBE as the bank undergoes this change. Thank you to FirstRand Limited for the bold step and we wish you all the best as this process concludes over the next few months,” said Mkhomo.
Minister of Finance Martin Dlamini said the intent to list shares on the SSX marks a major milestone for FNB and the country.

He said the announcement was evident that policies being implemented by government to attract Foreign Direct Investment (FDI) were indeed producing the desired results.

Policies that have most recently been put in place to attract FDI include, but not limited to, promulgation of Special Economic Zones Act of 2018, which entails a 20-year tax holiday for businesses to be established at the designated special economic zones which are: Royal Science and Technology Park together with the King Mswati III International Airport.

“Thank you for believing in the people of Eswatini. This development will definitely improve SSX and the country’s economy as a whole,” said Dlamini.

Financial Services Regulatory Authority Chief Executive Officer Sandile Dlamini also shared similar sentiments. He mentioned that they eagerly anticipate receiving and reviewing the application by FNB to list the shares on the SSX.

“It is very humbling and pleasing to note how much FNB is committed to improving the livelihood for the people of Eswatini. It is without a doubt that the latest development will greatly improve entrepreneurship in the country.”
Meanwhile, the Federation of Swaziland Employers and Chamber of Commerce President Andrew le Roux anchored Sandile’s statement to the effect that the presented investment opportunity would improve local entrepreneurs.
He said as the business community they were excited by the chance to become shareholders of the highly profitable institution and look forward to the eventual listing of shares on the SSX.
“This development shows that FNB has confidence in the local business community. As a federation we would like to congratulate FNB for the bold step and also call upon the businesses to take up the opportunity to own shares at one of the most technologically advanced banks in the country,” le Roux advised.