HomeNewsFBC Holdings submits capitalisation plan

FBC Holdings submits capitalisation plan


FBC HOLDINGS has submitted it’s capitalisation plan to the Reserve Bank of Zimbabwe (RBZ) following the hiking of the minimum capital requirements from $12,5 million to $100 million for commercial banks.

Report by Mernat Mafirakurewa Acting Business Editor

The RBZ in September announced a phased recapitalisation exercise for the financial services sector.

All banks should have met the new requirements by June 2014.

Speaking at the Zimbabwe Independent Banks and Banking survey last week, FBC Bank managing director Webster Rusero said the plan had been endorsed by its auditors.

“We have, as FBC Holdings and all the subsidiaries, submitted our plans to the central bank for capitalisation and plans have also been endorsed by our auditors, an indication that we are here to stay and with your support we can go far,” Rusero said.

Under the new measures, banking institutions are expected to comply with 50% of the prescribed minimum equity capital for their varying classes by June next year.

Shareholders are also expected to increase that threshold to 75% by year end before fully complying at the end of June 2014.

On Friday, FBC Holdings issued a cautionary statement advising shareholders it was engaged in negotiations.

“The board of directors of FBC Holdings would like to advise shareholders that the group is currently engaged in negotiations which if successfully completed, would have material effect on the structure of the group and may have a material impact on the company’s business and share price,” reads part of the cautionary statement.

Rusero said the bank had been a significant player in the financial services sector since it was granted a licence 15 years ago.

The economic space, according to Rusero, had remained highly volatile locally and globally.

He said the debt-induced economic crisis triggered a series of negative economic effects in the developed and emerging markets, with some spillover effects filtering through to developing countries.

“The political and regulatory uncertainties in our market continue to impinge on our capacity to negotiate credit lines in terms of the term structure as well as cost of funding,” he said.

“Out there in the market the libor rate is below zero and when you put a margin of normally 3-5% you should be able
to lend money in Zimbabwe at about 3-5%, but the institutions that we talk to out there put a premium for country risk and most of our lines land at about 8-10% and that in US$ terms is very expensive.”

Rusero said despite the challenges, FBC holdings and its subsidiaries continue to perform well.

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