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Capricorn Investment Holdings (CIH), the parent company of Bank Windhoek, has made inroads into the Zambian financial services sector through an acquisition in Cavemont Capital Bank Ltd, also known as Cavemont Bank. In 2006, Capricorn kick-started its bold expansion plans by acquiring a substantial shareholding in Botswana’s Bank Gaborone.

 

Sources within the banking sector say CIH’s entry into the Zambian market is widely seen as part of its expansion strategy into regional markets, with more acquisitions envisaged for Mozambique, Angola and other parts of Africa. Zambian Stock Exchange- listed Cavemont Capital Holdings Zambia PLC is the holding company that is now co-owned by CIH Namibia.

 

Senior Bank Windhoek managers spent most of 2008 in Lusaka to prepare for and facilitate the take-over by the smaller Namibian bank. Cavemont Capital Bank offers low-cost banking solutions for the previously unbanked low-to-middle income groups in Zambia. The bank will soon roll-out new products and says it will raise the existing service levels at its branches throughout Zambia.

 

“Our biggest challenge this year will be to transform Cavemont Capital Bank from what is essentially a savings bank into a full scale retail bank,” said Silke Feldmann, Group Corporate Communications Consultant for CIH this week.

 

Feldman added that CIH also looks forward to a substantial growth of Bank Gaborone’s assets “in a responsible manner” in 2009.

 

She said “Capricorn Investment Holdings (CIH), the ultimate holding company of Bank Windhoek, took a decision in late 2007 to acquire a 44.2% shareholding in Cavemont Capital Holdings, which is the holding company of Cavemont Bank Ltd. – 25% of which are voting shares.”

 

CIH was established in 1996 as a regional financial services group. The group has interests in banking, insurance, asset management and micro-finance, with a diversified business portfolio in Namibia and Botswana. The group says it has been exploring new investment opportunities throughout the Southern African region since 2002.

 

“Regional banking interests were expanded with CIH’s acquisition of a banking license in Botswana in 2006 through Bank Gaborone Ltd, and the acquisition of 44,2% of shares in Cavemont Capital Holdings in Zambia, which own 100% of Cavemont Capital Bank,” she said.

 

The CIH group also holds substantial strategic investment in insurance and other financial services in Namibia and Botswana. CIH Namibia own 97.2% of Capricorn Investment Holdings Botswana, which in turn holds 91.7% of the shares in Bank Gaborone Ltd.

 

The Zambian investment deal by CIH Namibia was approved by Bank of Namibia (BoN) in liaison with the Zambian authorities to conform with rules and regulations of investment among SADC countries.

A source at BoN confirmed the central bank had sanctioned CIH’s move into Zambia but could not shed more light as the new venture is not regulated by the local authorities. The Bank of Zambia authorities were not available for comment this week.

 

However, the BoN representative said the move by CIH into Botswana and Zambia could been as a positive step towards regional integration by the financial services sector within the SADC region. “Movement of funds among countries within the SADC region is not a problem at this stage as the conditions set are quite relaxed and agreed among the member countries”.

 

Bank of Windhoek became a wholly-owned subsidiary of the CIH in November 2006 following the bank’s disinvestment from the Absa Group of South Africa. Since then, CIH has been looking into markets beyond Namibia’s border where Absa is represented through it parent, Barclays Bank.

 

“Following the acquisition of a controlling interest in Absa by Barclays Bank Plc in 2005, the CIH group and Barclays Group became competitors in neighboring countries in which CIH has banking interests,” says Bank Windhoek in its ‘Money Matters’ weekly column.

 

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