INTERFIN Bank Limited depositors may assume control of the financial institution amid indications that one of the frontrunners pursuing a takeover bid has developed cold feet, NewsDay Business has learnt.
Bernard Mpofu,Acting Business Editor
According to central bank documents seen by this paper, the apex bank is considering transferring control of the bank to depositors after plans by a South Africa-based restructuring and advisory firm to invest in the troubled bank hit a snag.
The Reserve Bank of Zimbabwe last year placed Interfin under the management of a curator after it was exposed to debts of more than $80 million.
The curatorship has since June 2012 been extended in a bid to shore up the institution.
“Delphini (Proprietary) Limited, a South African company which intended to acquire 100% shareholding in Interfin Bank and was expected to have commenced due diligence exercise at the bank by October 31, 2013, is yet to do so amid fears from the curator that the company might be developing cold feet,” read part of the report.
“In this regard, the curator advised the central bank that he will now give Delphini a time period within which they must decide whether to proceed or not. In light of these developments, the proposed deposit-equity conversion, which had been shelved pending the outcome of the Delphini deal, might have to be reconsidered.”
Last October, the bank announced that three potential investors had expressed interest in bailing out the financial institution.
The document further stated that Zimbabwe Alloys, which together with its associated companies, owe the bank $55 million, was placed under judicial management.
“Although the curator issued summonses in respect of loans amounting to $105,58 million, only $14,19 million has been collected to date (September 2013.)
“The total judgments and provisional sentences obtained constitute 66,73% of the total applied for,” RBZ said.
Official figures showed that interbank exposures to troubled institutions including Interfin amounted to $2,09 million as at September 2013, accounting for 0,42% of $499,73 million total banking sector interbank liabilities indicating that the institutions are of relatively low systematic significance to the interbank market.
Meanwhile, the RBZ has placed seven troubled banks under surveillance amid concerns that the financial institutions could be facing insolvency problems.
According to a confidential central bank document seen by this paper, as at September 2013, a total of 14 out of 21 operating banking institutions (excluding POSB), were in compliance with the December 2012 minimum capital requirements of $25 million.
The troubled banking institutions’ total assets, total deposits and total loans amounted to $755,64 million, $456,24 million and $481,62 million as at September 2013, accounting for 11,43%, 12,09% and 12,75% of the banking sector’s total assets, total deposits and total loans respectively.
A total of 15 operating banks (excluding POSB), the central bank report further said, recorded profits for the nine months ended September 2013.