Capital Bank submits recapitalisation plan

HARARE - Capital Bank Corporation Limited (Capital Bank) has submitted its recapitalisation plan to the Reserve Bank of Zimbabwe (RBZ) after it missed the December 31, 2012 deadline.

According to RBZ’s phased recapitalisation requirement, commercial and merchant banks are supposed to have a minimum capital of $100 million by June 2014.

In the first phase, the institutions were required to have a minimum capital of $25 million by December 31 last year, up from the initial $12,5 million.

Joseph Kanyekanye, Capital Bank’s chairperson, told businessdaily yesterday that Capital Bank had written to the central bank outlining its recapitalisation scheme, following the expiry of the deadline.

This comes as the bank was supposed to hold an extra ordinary general (EGM) meeting on December 31, seeking shareholder approval of a $20 million rights issue.

“The EGM has been adjourned to a later date,” Kanyekanye said.

“This was after realising that the proposed date was not suitable for many of our shareholders who were on holiday,” he said.

While the central bank has not officially announced the banks which have complied since the lapse of the deadline, several institutions are battling to increase their capital due to a liquidity crisis, among other challenges.

However, RBZ governor Gideon Gono has said he will consider extending an olive branch to some banks, which failed to meet $25 million target by December 31 deadline.

“Where there is evidence and credible efforts towards compliance, we will be flexible in terms of our judgment or assessment of a particular institution,” Gono said.

“December 31 is the monetary authority’s and government deadline. But it does not signal the Armageddon of the bank. It is a planning date again during which certain action and programmes are anchored on. It is not meant to be a fatality,” said the central bank boss.

Going forward, banks are required to raise 50 percent of the $100 million minimum capital by June 2013, 75 percent by December same year and 100 percent by June 2014.

Last month, a source close to Capital Bank’s recapitalisation developments told businessdaily that following compliance, the bank was considering re-looking at its business model, as indicated during its rebranding exercise.

“Capital Bank intends to change from its current merchant bank model to a micro-finance bank,” the source said.

“The new model will allow Capital Bank to contribute significantly towards economic growth through a wider and far-reaching product offering to the middle markets,” the source said.

The source, however, said the institution awaited regulatory approval.

Capital Bank, which recently rebranded from Renaissance Merchant Bank after a $24 million bailout by Nssa, emerged successfully from recuperative curatorship and is now on a firm growth path.

Nssa — a pension fund —currently holds an 84 percent stake in the bank. - John Kachembere

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