By Alois Vinga
LISTED financial services group’s subsidiaries, CBZ Building Society and CBZ Bank Limited have approached government seeking permission to amalgamate the two units.
In an update, the Reserve Bank of Zimbabwe (RBZ) said the institutions sought approval from Finance minister Mthuli Ncube for the procedure which is expected to harness their potential and efficiency.
“It is hereby notified that CBZ Bank Limited and CBZ Building Society, both incorporated under the laws of Zimbabwe and carrying on banking business, have applied to the Minister for approval of the amalgamation,” the RBZ said.
In business terms, amalgamation is the combination of two or more companies into one entity and the process is achieved by combining the assets and liabilities of both entities into one.
Practically, this differs from a traditional merger in that neither of the two companies involved survives as an entity.
The transferor company is absorbed into the stronger, transferee company, leading to an entity with a stronger customer base and more assets.
The two entities are both registered in line with the banking laws of the country and to facilitate the amalgamation of assets, liabilities, and equity, the two institutions propose to consolidate under one entity, CBZ Bank Limited.
“This is in conformity with a Memorandum of Agreement that they have entered into. After the move, CBZ Building Society will cease to exist as an entity.
“The MOU in terms of which the amalgamation is to be effected will be open for inspection by members of the public for a period of 21 days from the date of publication of this notice in the Government Gazette at the following offices,” the central bank added.
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