First Capital Bank (FCB) has authorized the delisting of the bank from the Zimbabwe Stock Exchange (ZSE), which would be followed by a listing on the Victoria Falls Stock Exchange (VFEX).
According to the results of the extraordinary general meeting conducted on May 4, 2023, FCB will now delist on May 17, 2023, followed by the VFEX listing on May 19, 2023, according to a circular.
FCB will be the first publicly traded bank to delist its shares from the ZSE, followed by a listing on the VFEX.
Since its inception in 2020, a number of enterprises have shifted to VFEX.
Padenga Holdings Limited, Simbisa Brands Limited, SeedCo, Caledonia Mining Corporation, Bindura Nickel Corporation Limited, Innscor Africa, and National Foods are among those involved.
In a recent update, FCB said the board had approved the delisting and migration to VFEX transaction.
VFEX offers a number of incentives and trading advantages compared to the ZSE for which has been the pulling factor for listings.
The US dollar-denominated securities exchange provides extended options for capital raising including debt listing in foreign currency.
The US dollar bourse also offers lower trading costs of 2,12 percent compared to 4,63 percent on the ZSE and this would enable shareholders to retain more value.
VFEX also offers tax incentives for shareholders, which include a lower 5 percent withholding tax on dividends and no capital gains tax on share disposal, thus providing enhanced earnings for shareholders compared to the ZSE.
Furthermore, the US dollar provides a hedge against the inflation of the Zimbabwe dollar, providing greater investor protection.
According to FCB’s latest trading update, the Bank will adopt a cautious lending approach that involves extensive assessment of borrower capacity as part of efforts to avert risk.
This comes as the bank expects the aggressive liquidity management policies and high-interest rates monetary framework to subsist as means to counteract inflationary pressures.
According to the bank, this may present downside risks on credit performance as borrower capacity to carry related costs is strained.