Azania’s Managing Director, Charles Itembe said in Dar es Salaam this week while officially taking over the troubled bank under Bank of Tanzania directives that ABL clients will also start getting services from three Bank M branches in Dar es Salaam next May.
The acquisition takes Azania Bank into tier one group of elite commercial banks in the market further expand its footprint from 19 to 22 branches while its capital base surges 64bn/- to 181bn/- and its balance sheet crosses a trillion shillings mark from half a trillion.
The Central Bank announced last week that effective 15th March, 2019 assets and liabilities of Bank M have been transferred to ABL after the two parties signed the transfer agreement.
“This long awaited move will further heighten confidences in the banking system while pushing Azania Bank’s market share into tier one banks category. The acquisition is expected to result into greater efficiency through improved processes, transformational incentives and will significantly increase our share of wallet,” Itembe said.
In August 2018, Bank of Tanzania placed Bank M under statutory management for failure to meet regulatory financial requirements following a sustained breach of liquidity requirement ratios.
The acquisition was made possible following Azania Bank’s expression of interest, conducting of due diligence and a detailed proposal program with promises of continued engagement with shareholders.
Azania Bank through its existing shareholders PSSSF (51.95 percent), NSSF (27.99 percent), EADB (0.51 percent), Minority (0.34 percent) and new shareholders (National Health Insurance Fund (17.42 percent) and Workers Compensation Fund (1.79 percent) finally reached consensus to re-capitalize Azania Bank to acquire Bank M and subsequently continue to support the bank’s smooth take over.
The Azania chief executive said the modality of taking over of the defunct bank was under acquisition by the operation of law. “We felt this property was essential to ABL’s operations. The full integration of the two banks is set to be completed in 45 days from the day we signed the agreement with BoT,” Itembe noted saying Bank M and their ABL peers will get services from both banks’ branches effective next May.
ABL shareholders resolved during an extraordinary Annual General Meeting held in December, 2018 to re-capitalize the bank and also invite new shareholders who also agreed to inject capital to strengthen its finances before acquiring Bank M.
“Within these 45 days we expect to complete full integration of systems and migration of financial date, review of processes, staff need assessment and complete all contractual matters after which all Bank M clients will continue to be served at any branch of their choice across Tanzania,” he added.
The move will subsequently lead to the rebranding of Bank M’s existing branches at Kisutu, Pugu and Arusha into the ABL corporate colours and logo.
Last year, Azania Bank recorded very impressive financial performance in terms of profitability and assets growth a profit before tax of 8.2bn/-, a growth of 231 percent compared to 2.5bn/- made in 2017.
On its balance sheet, the bank’s growth reached 504bn/- being an increase of 29 percent from 390bn/- recorded in 2017.
Last year, ABL also continued with its strategy of improving financial services delivery with the opening of two new branches one in Morogoro and another Dodoma city.