ZB Financial Holdings says plans to merge its bank and building society will continue despite the recent extension by the Reserve Bank of Zimbabwe of the banking sector minimum capital requirements deadline from June 30 this year to December 31, a senior official has said.
ZB Bank acting managing director, Mr Shadowsight Chiganze told The Herald Business that the proposed merger will go ahead as per plan since it does not only seek to address capitalisation compliance but also operational efficiencies.
“The proposed merger of ZB Bank and ZB Building society is still going ahead as planned notwithstanding the extension of the compliance deadline.”
“The transaction was not only motivated by the capital adequacy requirements but also by the desire to obtain operational efficiencies,” he said.
ZB Bank is already fully compliant while the merged entity will also ensure full compliance with the minimum capital requirements.
Acting Reserve Bank of Zimbabwe governor, Dr Charity Dhliwayo last week affirmed that capital levels will remain as per the thresholds obtaining in December 2012 in her 2014 Monetary Policy Statement.
The minimum capital threshold for Commercial and Merchant Banks will remain at US$25 million while Building Societies would be expected to maintain US$20 million.
Discount and Finance Houses will be expected to have a minimum capitalisation of US$15 million while Microfinance Banks will be expected to maintain at least US$5 million.
Prior to the latest developments, the minimum capital thresholds set under former RBZ governor Dr Gideon Gono required commercial and merchant banks to raise their capital base to at least US$100 million by June 30 this year, while US$80 million was required for building societies.
All banking institutions are however required to submit to the Reserve Bank comprehensive recapitalisation plans to meet the new deadline, by 30 June, 2014.
The Central Bank will monitor and evaluate progress made by banks towards attainment of capital milestones as outlined in their respective recapitalisation plans while all banking institutions are expected to continue their efforts to strengthen their capital positions in order to maintain relevance in the economy.