The ZB takeover was meant to be a key chess piece in CBZ’s ambitions to consolidate its market dominance and build a big bank with regional clout.

But while the Competition and Tariff Commission (CTC) approved the deal, it came with a condition that stripped CBZ of the very assets it coveted most: ZB’s stake in property giant Mashonaland Holdings and its insurance businesses. For CBZ, this condition was the dealbreaker that forced it to walk away.

ZB is the largest shareholder in Mashonaland Holdings, one of Zimbabwe’s biggest property developers, with a portfolio that was worth US$85 million last year.

In 2023, ZB Life Assurance, ZB Financial Holdings, and ZB Reinsurance together controlled half of Mashold.

“Our main attraction is not really banking, but the other business units, which is your insurance, which is your property,” CBZ CEO Lawrence Nyazema had said last year.

CTC, however, ruled that the merger could only proceed without these assets. CBZ Chairman Luxon Zembe says that left the bank with no choice but to drop the takeover.

“We got the go-ahead, but on condition that ZB disinvests from key assets, Mashonaland Holdings, Cell Insurance and ZB Reinsurance,” Zembe says.

“But these were the very assets that we sought in the merger. It therefore made no business sense (to continue with the deal).”

Zembe dismisses CTC’s concern that the merger would create a monopoly. Instead, he argues, Zimbabwe needs a homegrown bank with the scale to underwrite major projects at home and to compete in the region, which is dominated by big South African banks.

This is not the first time CTC has blocked CBZ’s expansion; earlier, it barred the bank from taking control of First Mutual Limited.

“They decided to kill the deal, and to kill the national strategy,” Zembe says. CTC also insisted that CBZ and ZB continue operating separately—another condition that CBZ rejected.

The regulator, says Zembe, has no business setting strategy for companies.

A factor in CTC’s ruling may have been the long-standing dispute between Nicholas Vingirayi’s Transnational Holdings and ZB Holdings.

During Zimbabwe’s 2004 banking crisis, RBZ took over Intermarket Holdings Limited, a Transnational subsidiary, alleging mismanagement.

Intermarket’s assets—including the life insurance business and a stake in Mashold —were later sold to ZB. In 2015, the government reversed the takeover, and Transnational has claimed it is owed a significant stake in ZB.

Vingirayi had urged CTC to block the CBZ-ZB merger until the dispute was settled. In a letter to the regulator last year, he accused CBZ and ZB of acting in bad faith: “ZB and CBZ are approaching the authorities with unclean hands.”

For CBZ, the biggest loss is Mashonaland Holdings and its growing property portfolio.

Mashold owns a vast real estate book, including ZB Life Towers, West End Clinic, and Bluff Hill Industrial Park.

It has also completed new developments such as the Pomona Commercial Centre, with 14,000 square metres of lettable space, the Milton Park Hospital, and Mashview Gardens in Bluffhill.

CTC has not responded to requests for comment.

NewZwire