Swabou and First National Bank of Namibia have finalised months of negotiations in a deal that will see FirstRand control 60,3% of shares in the newly constituted firm, FNB Namibia Holdings.
However, it will have to be approved by the smaller shareholders, the Bank of Namibia and the Namibian Stock Exchange before it goes ahead.
Swabou's shareholders, which include the Government Institutions Pension Fund, national rail and road carrier TransNamib and investment company Nam-Harvest, will get the rest of the equity with preference shares.
The value of these shares will be tied for five years to the performance of the City Savings and Investment Bank operations, which Swabou bought out in April.
After that they will be converted into ordinary FNB Namibia shares. When that happens, FirstRand's stake could go down to 55%.
'The merger makes business sense,' said Nama Goabab, Swabou Holdings MD.
FNB CEO designate Lazarus Ipangelwa said the merger would create 'a broadly based financial services company with a Namibian character and orientation'.
It would, he said, improve economies of scale in the mortgage loans business, create opportunities for cross-selling of banking and insurance products, and allow both businesses a chance to penetrate new markets.
An undisclosed number of positions will become redundant, but no forced retrenchments are envisaged. Instead, they believe resignations and retirements will achieve all the streamlining needed.
'We will do all that we can to avoid the job losses at all costs,' said Ipangelwa.
Business Day
Publisher: Business Day
Source: Inet Bridge
