20 January 2013

Zimbabwe: U.S.$9 Million Rescue for Trust Bank

Last year, Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono announced phased capitalisation deadlines for banks to achieve a minimum equity capital of US$100 million by June 30 2014.

The first phase of the deadline for banks to have US$25 million lapsed on December 31.

The second phase deadline is June 30 this year where banks are required to have US$50 million.

Banks are required to have minimum equity capital of US$75 million by December 31.

Trust executives told Standardbusiness last week that the US$9 million bailout was subject to approval from the bank's shareholders at a crucial meeting tomorrow.

The executives said foreign investors are prepared to join the party with at least US$20 million before the June 30 second phase deadline.

The proposed injection by Trust's shareholder comes at a time other banks -- Metbank, Kingdom, NMB and Ecobank --have announced compliance.

They are now working on the June 30 deadline.

The four institutions join CBZ, Standard Chartered, CABS, Barclays, Stanbic and TN Bank that had more than U$25 million in minimum equity capital way before the deadline.

NMBZ Holdings group chief executive officer, James Mushore, told Standardbusiness last week that its banking unit had complied by December 31 and was working on measures to comply with the second phase of the deadline.

Pan African group, Ecobank and its local partners recently injected US$15 million into Ecobank Zimbabwe Limited and have pledged support to the bank ahead of the remaining phased deadlines.

Metbank managing director, Belmont Ndebele said on Friday that the bank's shareholders' equity as at December 31 amounted to US$44,5 million, way above the required threshold.

He said the bank would raise capital from existing shareholders in the first half of the year.

"During the course of the first half of 2013, the shareholders have resolved to inject new capital in the sum of US$25 million by way of a rights issue," said Ndebele.

"The US$25 million capital injection will result in the total shareholders' equity increasing from US$44,5 million to US$69,5 million, which is well above the prescribed minimum capital of US$50 million as at 30 June 2013."

Kingdom Bank Limited said it complied with the December 31 2012 deadline, figures which would only be disclosed when the group publishes financial results for the year ended December 31.

ZABG board chairman Farai Mutamangira told Standardbusiness that the bank was working on the finer details of the capitalisation transaction that would be finalised by end of this month.

FBC and ZB said last year that they would merge their buildings and commercial banking units to attain the required threshold.

The duo has both commercial bank and building society units.

Its common shareholder, National Social Security Authority has mooted the merger of units where it has shareholding.

MBCA has the backing of its parent, Nedbank, one of South Africa's top banks.

No comment could be obtained from Tetrad as calls went unanswered.

Gono is set to announce the way forward for banks in his monetary policy statement to be presented by end of the month.

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