HomeBusinessBanks rush to recapitalise ahead of RBZ deadline

Banks rush to recapitalise ahead of RBZ deadline

THE Reserve Bank of Zimbabwe (RBZ) has certified Metbank compliant with the US$25 million minimum equity capital thresholds, while other undercapitalised banks are working round the clock to recapitalise, as another deadline looms in June.


Banks are supposed to have minimum equity capital of US$50 million by June 30 following new regulatory requirements.

In his Monetary Policy Statement in January, RBZ governor, Gideon Gono said five banking institutions — Agribank, FBC Building Society, ZB Building Society, Metbank and Trust —had made significant progress towards compliance, in terms of the credibility of their capitalisation plans.

Sources told Standardbusiness on Friday that RBZ recently wrote to Metbank confirming that the bank a complied with the minimum capital requirements of US$25 million for commercial banks as at December 31 last year.

Industry sources said last week that Trust is awaiting approval from the Zimbabwe Stock Exchange on the application that would allow a key shareholder to inject US$9 million.

The application had been held back by the audit and valuations of the bank. If the approval is granted, the bank needs 21 days’ notice to call for an extraordinary general meeting of shareholders. Once the recapitalisation is approved at the meeting the injection would be effected.

The move would come as a relief to Trust’s clients who have been failing to access their monies.

Standardbusiness was also told that Trust signed four non-disclosure agreements with four banking institutions paving the way for a merger with one of the banks.

FBC Holdings recently announced that it would merge its commercial banking and building society units.

ZB Financial Holdings was reported in our sister paper, NewsDay, to be courting some Indian investors.

ZB and FBC have a common shareholder, the National Social Security Authority (NSSA). The two institutions were supposed to merge but the plan collapsed after both institutions said they had credible capitalisation plans.

Capital Bank is understood to be carrying out a phased recapitalisation approach to raise US$20 million from existing shareholders.

To date US$5 million has been raised and an additional US$6 million would come in the next two weeks, according to people familiar with the developments.

The bank has plans to convert its licence into a micro-finance bank that would enable it to lend to workers. Its major shareholder, NSSA, addresses the concerns of the employees.

“The plan going forward is that we will convert some of NSSA’s offices countrywide into banking halls to be able to serve clients, but no to mergers,” a source said.

In January, Gono said Capital Bank and Allied Bank (formerly ZABG) had recapitalisation plans in need of further improvement to render them credible.

Gono said that the recapitalisation plans were considered credible and are expected to come to fruition after the December 31 2012 deadline.

Banking executives said they would not comment on recapitalisation plans citing an RBZ directive that forbids them from doing so “without seeking prior Reserve Bank approval”. In January Gono warned that “any such unsanctioned declarations will attract appropriate regulatory action”.

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