Trust courts foreign investors

HARARE - Trust Banking Corporation (TBC) says negotiations with three potential investors to inject money to meet the central bank’s capital requirements are at an advanced stage.

William Nyemba, TBC chief executive, told businessdaily that the investors were all foreign and hoped a deal would be concluded before end of December.

“Local investors have no capacity,” Nyemba said.

He said TBC — currently trading under a cautionary — was holding $20 million and needed an extra $5 million to meet the Reserve Bank of Zimbabwe (RBZ)’s phased capital requirement.

“We are looking for more than the $5 million towards the $100 million minimum capital required,” he said.
“We have signed non-disclosure agreements with all the three investors,” Nyemba said refusing to disclose more detail.

In his Mid-Term Monetary Policy review in July, RBZ governor Gideon Gono announced that financial institutions had to meet new capital requirements in a phased approach between this year and 2014, in a bid to strengthen the financial sector and also protect depositors’ funds.

Commercial banks are required to raise their minimum capital from $12,5 million to $100 million while merchant banks must increase from $10 million to $100 million; building societies from $10 million to $80 million; finance houses from US$7,5 million to $60 million and microfinance banks from $1 million to $5 million.

Under the phased plan, financial institutions must comply with 25 percent of the prescribed minimum capital for their class of banking business by December 31, rising to 50 percent by June 30, 2013, and 75 percent by December 31, 2013. The banks must be in full compliance by June 31, 2014.

Zimbabwe currently has 26 banks, 16 asset management companies and 172 microfinance institutions under the supervision of the Reserve Bank. TBC was relicensed along with Royal Bank and Barbican Bank, after six years of litigation following the annexation of its commercial banking assets by ZABG in 2005. - Eric Chiriga, Business & Online Editor
 

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