We won't bail out banks: Nssa

HARARE - The National Social Security Authority (Nssa) says it will not bail out banks in which it has interests if they fail to meet the central bank’s recapitalisation requirements.

This comes as the pensions authority has deliberated on a Deloite & Touche report to assess the feasibility of merging its banking assets.

“The position taken by the board’s investments committee is that they will be no capital injection to stand alone units. It is up to the banks to think about it (the merger) for themselves,” James Matiza, Nssa’s general manager told businessdaily.

He said Nssa will not impose a merger of the institutions as initially considered.

Last year, the Reserve Bank of Zimbabwe (RBZ) ordered banks to recapitalise to a minimum $100 million in a phased manner.

In the first phase — whose deadline expired on December 31, 2012 — commercial and merchant banks were supposed to increase their minimum capital to $25 million, then up it to $50 million by June 30 this year and $75 million by December 31.

The institutions should reach $100 million by June 30, 2014.

Nssa’s shareholdings in banks include 26 percent in FBC Holdings Limited (the owner of FBC Bank), 40 percent in FBC Building Society, 37,9 percent in ZB Financial Holdings (the parent company of ZB Bank Limited and ZB Building Society) and 84 percent in Capital Bank.

It also holds an 11,6 percent stake in CBZ Holdings, the proprietors of CBZ Bank Limited.

According to RBZ’s 2013 Monetary Policy Statement, CBZ Bank and FBC Bank complied with the initial $25 million phase while ZB and FBC building societies missed with their capital standing at $14,56 million and $18,97 million respectively.

Capital Bank fell short by $17,5 million.

RBZ governor Gideon Gono said ZB and FBC building societies had made significant progress towards compliance while Capital Bank’s proposal needed further improvement.

Matiza, however, pointed out that Capital Bank will be raising funds through a rights issue to be announced soon.

He said Nssa will only avail funds if the banks merge into a single entity as they cannot afford to fund competing stand-alone interests.

“… going forward we will not accept any request for capital injection from shareholders unless if they resolve to merge, it would be preferable to capitalise one big entity,” said Matiza.

Matiza said as a shareholder, Nssa had the prerogative to determine the future of its investments although it was up to all the stakeholders to reach a consensus on the way forward. - Kudzai Chawafambira

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