Banks on course to meet RBZ threshold

Banks on course to meet RBZ threshold
Published: 20 April 2018
A MAJORITY of listed banks are on track to achieving the prescribed Reserve Bank of Zimbabwe (RBZ) minimum capital requirement of $100 million by 2020 with some having already surpassed the threshold.

CBZ Bank and CABS have already surpassed the minimum regulatory requirements of $100 million for Tier 1 banks with total core capital amounting to $139.2 million and $114 million respectively as at December 31, 2017.

Financial statements for the year ended December 31, 2017 released in the first quarter of this year reveal that a majority of the banks were on track to reach the $100 million regulatory requirement. A huge core capital base indicates long-term stability for the banking sector that in recent years was characterised by bank failures, particularly indigenous-owned financial institutions.

Some of the listed banks on track to meet the minimum regulatory capital requirement include FBC Bank, People's Own Savings Bank (POSB), Barclays, AgriBank, CABS and Ecobank. In the full year ended December 31, 2017, FBC Holdings indicated that its subsidiaries remain of strategic importance with all its units well capitalised above the regulatory minimum thresholds required by the Reserve Bank of Zimbabwe.

"In the case of FBC Bank, we are confident that the unit will trade itself into compliance, with only $8 million annual profits required between 2018 and 2020 to achieve the capital target of $100 million by 2020," said group chairman Mr Hebert Nkala.

Irrespective of the 2017 operating environment, he said, his bank achieved an after tax profit of $12 million.

"With the existing positive outlook, we are optimistic that the bank will continue to improve its performance," he said.

Agribank's capital adequacy ratio at the close of 2017 stood at 39 percent reflecting an improvement on the 36 percent achieved the previous year. During the period under review, the bank's chief executive officer Mr Sam Malaba said efforts to increase capital levels to $100 million by 2020 were ongoing. The bank's regulatory capital as at December 31, 2017 was $54.9 million.

POSB core capital as at December 31, 2017 stood at $54 million up from $40.5 million the previous year. Barclays Bank chairman Mr Anthony Mandiwanza said in a statement for the financial results ended December 31, 2017 that his bank was also on course to meeting the minimum core capital level of $100 million from growth and retention of profits.

"Ecobank core capital was at $77.3 million during the period under review and this reflected a year-on-year growth of 34.8 percent. The bank's chairman Mr David Whatman said this was well ahead of the RBZ's approved capital plan of $25 million.

ZB Financial Holdings total core capital base as at December 31, 2017 stood at $18.5 million. The banking group's chief executive officer Mr Ronald Mutandagayi said they expected to meet the minimum capital requirements for its banking operations within the stipulated time frame largely from organic growth.
- zimappers
Tags: RBZ,


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