Finance Bank (FB) Zambia Limited plans to acquire majority shares in an unspecified Zimbabwean commercial bank

banks_zimA ZAMBIAN financial institution, Finance Bank (FB) Zambia Limited plans to acquire majority shares in an unspecified Zimbabwean commercial bank it has emerged. Finance Bank announced the move saying that the deal could be concluded by the end of the year.

The banks executive director – corporate banking and marketing, Noel Nkoma said work was in progress to ensure that all the necessary paper work was being done.
We are in discussion with a named commercial bank to acquire majority equity and subject to regulatory approvals, we are confident that we should enter the Zimbabwean market in the next one year or so, Nkoma said.

Following Finance Banks plans to expand its wings in the Zimbabwean market its plans to list on the Lusaka Stock Exchange (LuSE) this year have been re-scheduled to the second quarter of 2010. Nkoma said they were targeting the Zimbabwean banking sector in response to calls by Zambian president Rupiah Banda to lend support to Zimbabwean businesses by way of credit.

There has been increased interest by foreign financial institution on the countrys banking sector as they seen creep around on key asserts at a time when local banks are grappling for lifelines ahead of the first deadline for new capital requirements by the Reserve Bank.

The Reserve Bank of Zimbabwe said banking institutions including assert managers had to meet part of the minimum capital requirements by September 30 with full compliance expected by March next year.

According to Reserve Bank, commercial banks will by September be required to have a minimum capital of US$6,25 million while building societies and merchant banks will be required to have minimum capital of US$5 million each.
Minimum capital for finance and discount houses has been set at US$3,75 million per institution.

Asset managers are required to have US$1,25 million as minimum capital.
Last week Finance minister Tendai Biti said a capital verification exercise conducted by the Reserve Bank in April and May 2009 indicated that of the twenty eight banking institutions operating in the country, fifteen were found to be in compliance with the minimum capital requirement, whilst three are marginally below, with the remaining ten being undercapitalised.

This has raise concern that some banking institutions could fail to raise enough cash to meet the prescribed equity capital requirements could result in mergers.

Post published in: Economy

Leave a Reply

Your email address will not be published. Required fields are marked *