Turnall disposal to boost capital: FBCH

HARARE - FBC Holdings (FBCH) says it will channel cash from the sale of its shareholding in non-core business Turnall Holdings Limited (Turnall) towards meeting its minimum capital requirements set by the Reserve Bank of Zimbabwe (RBZ).

The group’s banking unit FBC Bank Limited (FBC Bank) has already complied with the central bank’s first recapitalisation phase of $25 million whose deadline expired on December 31, 2011.

Last year, RBZ governor Gideon Gono ordered banks to increase their capital — in a phased manner — to a minimum $100 million by June 2014.

In the first phase, the banks were supposed to have a minimum capital of $25 million by December 31, 2012, then increase to $50 million by June 30, 2013 and $75 million by December this year.

“This figure ($75 million) will be easily attained after selling our 59 percent stake in Turnall Holdings during the course of the year. By factoring in trading income for the year, we will have over-complied with the capital requirement set for that period,” said Priscilla Sadomba, FBCH group marketing head.

FBCH’s 59 percent stake in Turnall is currently valued at approximately $35 million and according to recent reports, a Russian resources firm and another company from Switzerland are leading bidders.

This comes as several banks are struggling to raise the capital. Sadomba said FBC Bank was currently capitalised to the tune of $32 million and will merge with its $20 million capitalised FBC Building Society to make a total capital base of $52 million.

“This means that FBC Bank will have an excess of $2 million without considering trading income for the ensuing period to meet the minimum capital requirement of $50 million by June this year and in addition to proceeds realised after Turnall’s disposal will meet $75 million by year end,” said Sadomba.

Meanwhile, the financial group awaits approval of its bid to acquire RBZ’s subsidiary Homelink (Private) Limited.

Acquiring Homelink — 100 percent owned by RBZ — would consolidate FBCH’s market share, particularly in mortgage lending, as the group already owns a building society.

Although Homelink’s primary objective since 2004 was to mobilise foreign currency remittances from foreign-based Zimbabweans who intended to buy homes locally, the company diversified into property development. - Kudzai Chawafambira

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