Harare — FBC Holdings will soon be asking shareholders to raise US$20 million for recapitalisation of its banking arm, FBC Bank, it has emerged.

Although the bank has a strong financial base of approximately US$16,3 million, a senior executive said the financial institution required additional capital as it prepares for new growth opportunities.

The Zimbabwe Stock Exchange-listed banking group had initially targeted US$50 million but this amount was regarded as impractical.

The management of FBC Bank, the country's fifth largest bank with a branch network of 14, wants the money for upgrading information technology systems, refurbishment of buildings and boosting treasury functions.

An executive, who chose to remain anonymous, said at least US$1 million would be used to upgrade the information technology system, another US$1 million for refurbishments, US$8 million for corporate and treasury functions and US$10 million for structured finance.

"The bank is earmarking quite a number of improvements such as an online facility where rates can be negotiated by dealers and clients . . . the bank also needs to come up with new competitive products and all these require additional capital than we have," said the executive.

FBC spokesperson Mr Agrippa Mugwagwa however, said the only recapitalisation initiative the group was pursuing was of FBC Building Society being implemented by the societies' two major shareholders.

"The two major shareholders (NSSA and FBC Holdings) are working on recapitalising the group to the tune of US$10 million," he said.

Analysts say while most banks have met the prescribed Reserve Bank of Zimbabwe capital requirements, this did not reflect the actual liquidity position as most banks included value of assets they own.

Early this month, the central bank said 23 out of 26 banking institutions had met the RBZ prescribed minimum capital requirements.

"We are likely to see more banks taking capital raising initiatives even though they managed to meet the central bank capital requirements.

"There is a huge possibility that rights issues or private placements would be pursued to boost liquidity," said one analyst with a local financial research firm.