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Nedcor Limited - Update on Zimbabwean Associate
NEDCOR LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06
JSE share code: NED
ISIN code: ZAE000004875
NEDBANK ASSOCIATE MBCA ENTERS INTO MEMORANDUM OF UNDERSTANDING WITH TRUST
HOLDINGS LIMITED OF ZIMBABWE
The major shareholders of Merchant Bank of Central Africa Limited ("MBCA"),
including Nedcor Limited subsidiary Nedbank Limited ("Nedbank") and Old Mutual
Zimbabwe, have signed a memorandum of understanding with Trust Holdings Limited,
the shareholder of Zimbabwe"s Trust Bank Corporation Limited ("Trust Bank"), to
enter into formal discussions regarding the possible merger of Trust Bank and
MBCA. MBCA is an associate company of Nedbank.
The last decade has seen a proliferation of banks in Zimbabwe. Many of these
smaller banks experienced difficulties in December 2003 when the Zimbabwean
banking crisis hit. Banks with strong controls and foreign shareholding support
benefited from the crisis as clients supported these banks. MBCA, which had been
positioned purely as a merchant bank and had been granted a commercial licence
in August 2003, was one of the banks that benefited.
While Nedcor"s main focus continues to be on its South African banking
operations, its strategy includes building a strong base throughout Southern
Africa. The governor of the Reserve Bank of Zimbabwe has supported the need for
consolidation in the banking industry in Zimbabwe. This makes it an ideal
opportunity for Nedcor to expand its operations in Zimbabwe at a relatively low
cost.
Trust Bank is well positioned in the corporate and commercial banking sector and
is an attractive opportunity, with 14 well located branches particularly in
Harare and Bulawayo. Prior to the crisis Trust Bank had a good reputation and
was one of the top rated local banks. Trust Bank"s client base is similar to
MBCA. The merger will allow the combined entity to establish a strong base in
the corporate and commercial market.
Should the proposed merger proceed, it is anticipated that Nedbank and Old
Mutual Zimbabwe Limited will have a controlling shareholding, with a strong
black economic empowerment interest, including staff, among the balance of the
shareholding.
In terms of the memorandum, a detailed due diligence investigation of the
respective operations will be conducted and appropriate valuation parameters
determined.
Should all parties agree on a merger ratio, they will enter into formal legal
agreements and proceed with the implementation of the merger, subject to
approval from regulators and shareholders.
For further information kindly contact:
Tier 1 Investor Relations
Tel: +27 (0)21 702-3102
Additional information on MBCA:
MBCA Finance, a private company registered in Zimbabwe, is an associate company
of Nedbank. Nedbank and Old Mutual Zimbabwe together control MBCA Finance. MBCA
Finance in turn has a 75% controlling interest in MBCA.
MBCA is an established bank with a 50 year corporate banking history in
Zimbabwe.
Trust Bank has an established commercial banking infrastructure and has a
sizeable footprint and client base in the corporate and retail sectors in
Zimbabwe.
Date: 15/04/2004 08:00:04 AM Produced by the JSE SENS Department
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