Interfin curatorship extended

HARARE - The Reserve Bank of Zimbabwe (RBZ) has extended Interfin Bank Limited (Interfin)’s curatorship to year-end.

Yesterday, Central Bank governor Gideon Gono said the extension takes into account “developments in the macro-economy that are militating against the injection of new capital.”

“These macro issues are matters that go beyond the individual institution or shareholder capabilities to resolve in the immediate future,” he said.

“Our telescopic view is that a lot of micro issues will be resolved in the medium and not short term due to the multiplicity of far reaching macro issues that can only be tackled after a range of major events in the immediate horizon,” Gono said.

He said the position or view also applies to banks’ capitalisation deadlines.

“...we are going to relax (capitalisation deadlines) a little bit in the mid-term monetary policy statement to take into account these developments,” Gono added.

The bank’s curator Peter Bailey of KPMG Chartered Accountants appointment has also been extended for the same period.

Interfin Bank — placed under curatorship in June last year— owes major depositors a combined $70 million in deposits.

In December last year, RBZ extended Interfin’s curatorship by another six months following revelations of gross mismanagement in June the same year, which led to the institution’s demise.

The latest development comes after Interfin Financial Services Limited (IFS) recently announced plans to implement a deposit to equity swap deal as part of strategies to rescue its troubled flagship banking subsidiary.

 If approved, the deposit-to-equity swap deal could see the bank’s top depositors such as pension fund National Social Security Authority (Nssa) and tax collector Zimbabwe Revenue Authority (Zimra) emerge as shareholders in the embattled financial institution.

“A scheme of arrangement, which involves conversion of deposits to equity in the bank’s quoted holding company, IFS, has been proposed,” said Timothy Chiganze, IFS’ chairperson. “…it will result in the reduction of the capital gap and strengthening of the balance sheet thereby becoming more attractive to potential investors,” he added.

The deposits owed include Al Shams Global’s $23 million, Finance ministry’s $18 million and Nssa’s $15 million.

Zimra lost a $3 million deposit, ABC Holdings $3 million, Seed Co $2,6 million and POSB $1, 8 million.
 
Interfin Bank faces lawsuits as the firms have engaged the High Court in a bid to recover their deposits.

Chiganze said IFS has to date issued a total of 200 summon to recover $79,3 million in loans.

Plans are already underway to retrench nearly half of its 300 plus workforce as part of efforts to contain costs and streamline operations.

Bailey earlier on confirmed the development to businessdaily, but could not disclose further detail.

“Yes it is true (that Interfin is retrenching), but I am not allowed to discuss such issues as I am prohibited from doing so by my letter of appointment,” Bailey told businessdaily. - Kudzai Chawafambira

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