6 August 2012

Zimbabwe: ZB Seeks U.S.$100 Million

Kariba — ZB Holdings is seeking to raise at least US$100 million to grow and underwrite more business, chief executive Mr Elisha Mushayakarara has said. He also said the group would merge ZB Bank and ZB Building Society to meet the new Reserve Bank phased minimum capital requirements.

"We have been on the market, looking for a capital injection and . . . there are ongoing discussions with potential investors to raise in excess of US$100 million to grow and underwrite more business," said Mr Mushayakarara at the launch of the ZB Bank 54th branch in Kariba.

A strategic partnership with an international financial institution will help the mobilisation of long-term lines of credit, which continue to constrain the banking sector, given the transitory nature of deposits.

Mr Mushayakarara said the group had already taken "necessary action" to increase its capital base, even before the announcement by the Reserve Bank of Zimbabwe of new minimum capital thresholds last week.

ZB plans to merge its banking arm with its building society to meet the RBZ conditions.

RBZ Governor Dr Gideon Gono announced the proposed new minimum capital requirements for commercial and merchant banks to US$100 million from US$12,5 million and US$10 million respectively.

On the merger of the bank and the building society, Mr Mushayakarara said the group had submitted an application to the Reserve Bank for the necessary approvals.

"Our application to merge the bank with the building society is with the RBZ. We have already agreed with the shareholder and the board to take that route. I would like to believe the RBZ will expedite the merger process," he said.

The central bank advised financial institutions that fail to comply to either merge operations or be acquired by financially stronger entities.

FBC Holdings last week said it intended to merge its banking division and the building society to meet the new minimum capital requirements.

Meanwhile, the Mayor of Kariba, Mr Nicholas Hwindiri, said he welcomed the opening of ZB Bank branch.

He said it was a clear demonstration of the bank's response to the needs of local business.

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