11 July 2012

Zimbabwe: RMB Seeks Commercial Bank Licence

ReNaissance Merchant Bank (RMB) is now seeking to convert into a commercial bank after returning to profitability, a board member has said, dismissing fears new shareholder, the National Social Security Authority (NSSA) could lose the bank to former owners.

NSSA took over RMB after the bank had crumbled due to delinquency by former shareholders. RMB had been placed under recuperative curatorship by the Reserve Bank of Zimbabwe (RBZ) before NSSA emerged with a rescue package.

Speaking to The Financial Gaz-ette's Companies & Markets in an interview, RMB board chairperson, Joseph Kanyekanye, said the banking unit had become profitable and would seek regulatory approval to start commercial banking activities to increase products.

"We also want to convert to a commercial bank because it allows us to have more products," Kanyekanye said, expressing confidence NSSA would be unaffected by current threats by former majority shareholder, Patterson Timba, to reverse the deal due to allegations the ReNaissance Financial Holdings Limited (RFHL) board which approved the transaction was illegal. RMB was wholly owned by RFHL prior to the takeover.

"With regard to the curator's powers, one may want to refer to Section 54 of the Banking Act, which states, under Section 24:20 that 'effect of placing banking institution under curatorship (1) The issue of a direction in terms of Section 53 shall have the effect of suspending the powers of every director, officer and shareholder of the banking institution concerned, except to the extent that the curator may permit them to exercise their powers'," said Kanyekanye.

He said in terms of the Act, RFHL had no right to convene any meeting or take any action without the curator's consent as alleged by Timba.

"In this case, the curator did not permit RFHL to hold an annual general meeting by the RFHL shareholders," said Kanyekanye.

He said RMB management had done a paper which had been approved by the board to rebrand RMB.

"Within 45 days, we will implement (the rebranding) including change of name, colours, attitudes, ambiance and location. We shall also be relocating from ReNaissance Park. There is going to be retraining for employees, right up to the chairman so that everyone gets to understand what we want to achieve as a bank," Kanyekanye said.

"Within the shortest possible time will be ready to launch a new bank with a totally different attitude anchored on good corporate governance, honesty, integrity and that we are people who will keep their word; and also we are already trading positively from a loss of US$8,5 million before we came in. We are quite confident that we will actually have decent earnings at the end of the year," he said.

He said he was eager to have those who abused depositors funds at the bank prosecuted.

"I am extremely disappointed that there are two criminal cases reported under serious fraud both by the RBZ (Reserve Bank of Zimbabwe) and the bank itself, which for some reason we do not appear to have any necessary traction. The police were given the supporting evidence and the case numbers. The RBZ case was filed as case number CR124/1/2012 then there is one reported by the bank under CR197/01/12, which was reported at Highlands Police Station," Kanye-kanye said.

Asked why has there had been no progress in the prosecution of offenders, Kanyekanye noted: "I am actually baffled by the whole thing. I can't understand it. Where I come from, when people do wrong they should be punished, but in this case people are actually glorifying people who abused depositors' funds. As chairperson of RMB, I am determined to ensure that the full wrath of the law takes its course sooner rather than later. My colleagues in the banking industry and the professional bodies should make a statement by dissociating themselves from people who have acted in this disgraceful conduct."

He said the bank had lost money invested in two failed banks, Genesis and Interfin, but indicated there were efforts to recover the cash.

"We have lost money to two banks - Genesis and Interfin. Genesis has agreed it is going to refund the amount, about US$600 000. Interfin is still under curatorship and we can't conclusively say we have lost money," Kanyekanye said.

The curator and NSSA sought the following approvals which were obtained: NSSA's investment committee approved the transaction subject to Cabinet approval, which was then obtained through the Minister of Labour and Social Services. The RMB board approved the transaction on October 6, 2011 on the basis of the valuation of the net asset value of the bank as at September 26, 2011 and PwC's valuation. The ReNaissance Financial Holdings (RFHL) board, as the shareholder, then approved the transaction on November 21, 2011. The Ministry of Youth Development, Indigenisation and Empowerment also approved the transaction in terms of the Indigenisation and Economic Empowerment Act on December 20, 2011 and so did the RBZ, the Ministry of Labour and Social Welfare and the Ministry of Finance on January 12, 2012, January 27, 2011 and January 31, 2012 respectively. Upon procurement of these approvals, the transaction then became effective.

Copyright © 2012 Financial Gazette. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.