Banks fail min requirements

Reserve Bank governor Gideon Gono on Wednesday said five banks had not met the bank’s minimum capital requirements by the March 31 deadline.

Gideon Gono
Gideon Gono

In a report, Gono said information to hand showed that Kingdom Bank, Royal Bank, ZABG, Genesis Investment Bank and ReNaissance Merchant Bank remained under-capitalised.

“As of March 31, 2011, 20 out of the 25 operational banking institutions, excluding POSB, which is regulated under a separate statute, had complied with our prescribed minimum paid-up capital requirements,” said Gono in his report.

The Reserve Bank had set a June 30 deadline for financial institutions to meet capital requirements of US$12,5 million for commercial banks and US$10m for merchant banks.

“Various extensions on capitalisation deadlines and numerous calls for market-oriented solutions, including mergers and acquisitions for the few banking institutions, which are not yet in compliance with capital requirements, should not be mistaken for regulatory forbearance,” he said.

He said ZABG had a negative bank balance of US$9,2 million while Genesis Investment bank had a negative balance of US$331 000. ReNaissance, with a negative balance of US$16 million has since been placed under curatorship.

Several other commercial banks remain fragile although they had, by March, managed to meet the minimum capital requirements.

TN Bank had a capitalisation of US$12,546m, Agribank US$12,8m, recently re-licensed Trust Bank US$13,358m and FBC Bank US$15,2m.

Top of the list of the most capitalised banks was CBZ Bank at US$50m, Standard Chartered at US$35,5m, Barclays Bank at US$31,4m, Stanbic Bank at US$29,1m, BancABC at US$28,3m, ZB Bank at US$20,9m, Interfin at US$19,5m, NMB at US$18,8m and MBCA at US$16,2m.

Gono said as of June 28 2011, 15 out of the 16 asset management companies had complied with the minimum paid up equity capital requirement of US$500 000.

Gono said local banks had repatriated 25 million rand worth of coins to South Africa. They had been holding the coins for months following resistance of acceptance on the local market, it has emerged.

Post published in: Business

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