Gono said this while presenting his Monetary Policy statement on Thursday, Gono said only 14 had complied with ZABG Bank, Capital Bank, Agribank, FBC Building Society, Trust Bank, Metbank and ZB Building Society yet to comply
“In the interest of transparency and accountability, I am pleased to report that a total of 14 banking institutions or 67 percent have met the 31 December 2012 minimum threshold,” said Gono.
Gono said consistent with pronouncements enshrined in the 2012 Mid Term Monetary Policy Statement, all banking institutions submitted their detailed recapitalization plans to the Reserve Bank by 30 September 2012, which were evaluated for credibility.
“Subsequently, the Reserve Bank engaged the respective banking institutions on the feasibility of their recapitalization plans. Generally, the recapitalization plans hinged on rights issues, mergers and consolidations, organic growth and fresh capital injections from both local and foreign investors,” he said.
Gono said two banks were in need of further improvement in capitalisation. The two are ZABG, currently on US$15,8 million capital and Capital Bank at US$7,5 million. Gono said he had rendered their plans credible and they were expected to come to fruition soon
Gono said ZABG might get a capital injection from NIEEB, which could be between US$20 million and US$30 million.
“Recapitalization plans for two banking institutions require further refinements to render them credible,” he said
Gono said banking institutions should cease making unilateral self exaltations in any media as regards compliance with prudential requirements including minimum capital, without seeking prior Reserve Bank approval.
“Any such unsanctioned declarations will attract appropriate regulatory action. At all times, banking institutions will be required to comply with the applicable minimum prudential requirements in respect of Asset Quality, Management and Corporate Governance; Liquidity and Earnings,” he said
Gono said the Reserve Bank had finalized a blue print of its Banking Sector Vision 2020. The vision is said to be centered around the pursuance of banking sector solvency and stability to anchor sustained economic growth and development.
“Within this context, the Reserve Bank envisions a banking sector by December 2020 with the following key features, characteristics and capabilities. A thriving banking sector with functional Lender of Last Resort and active interbank market,” he said
It will also entail the establishment of universal banks and an integrated framework. The vision will include adequately capitalized and competitive banking sector with the ability to support the funding needs of the economy and banks with ability to attract significant financial resources from both local and international sources.
Gono said attendant liquidity shortages coupled with the absence of an active inter-bank market, limited access to affordable external credit lines and absence of Lender of Last Resort compounded the domestic operating environment for banks.
Gono said this while president his Monetary Policy today, He said notwithstanding this, the country’s banking sector remains generally safe and sound.
“This is despite the challenges faced by Royal Bank and Genesis Investment Bank,” he said.
Royal bank is under curatorship, while Genesis surrendered its banking license.
Gono said underlying risks associated with adverse macroeconomic developments and mismanagement at some banks provided fertile ground for potential liquidity challenges and capital insolvency.
“Against this background, the Reserve Bank continues to vigilantly monitor and rigorously apply risk based supervisory techniques geared at facilitating the early detection of potential bank fragilities,” he said.
He said lending rates quoted by banks in 2012 remained high, in the backdrop of deep-seated liquidity shortages as a consequence of limited access to external credit lines and adverse balance of payments developments.
“The lending rates also reflected high Premiums charged by some banks, irrespective of their cost structures”
Banks which have complied
CBZ Bank Limited – US$111,79 million
Standard Bank – US$56,50 million
Stanbic Bank – US$45,62 million
BancABC – US$38,42 million
Barclays Bank – US$34,30 million
ZB Bank – US$32,34 million
Kingdom Bank – US$28,79 million
Ecobank – US$28,18 million
FBC Bank – US$27,97 million
MBCA Bank -US$27,14 million
TN Bank- US$26,90 million
CABS – US$26,76 million
Tetrad – US$25,19 million
NMB Bank – US$25,01 million
Recapitalization Plans in Need of
Improvement
BANK LEVEL OF CAPITALISATION
ZABG Bank – US$15,80 million
Capital Bank – US$7,50 million
Significant Progress Towards
Compliance
Agribank -US$22,64 million
FBC Building Society- US$18,97 million
Trust Bank- US$18,70 million
Metbank -US$17,70 million
ZB Building Society -US$14,56 million
Post published in: Business
This shows that our financial sector is really promising and in respect of my view compliance by banks to the new minimum capital requirement gives us more innovative opportunities and our investor will lot of cushion thereby geratly improving the economy at large