Metbank leads capitalisation race

LIVINGSTONE MARUFU

Metbank’s core capital requirement increased by 3798% to ZWL$2.61 billion as at December 31 2019 from ZWL$67 million as at June 30 2019 making the institution the leading capitalised bank in the country.

This has made the bank to quadruple the new minimum requirement which is currently at US$30m or ZWL$534m for large indigenous banks and all foreign banks.

Initially, the minimum capital requirement for banks was ZWL$100m which was later reviewed after it was eroded by rising inflation.

Ecobank is the second capitalised bank at ZWL$757.37m, CBZ (ZWL$712m) and Stanbic at ZWL$650m.

Metbank was founded in 1999 with Enock Kamushinda and the Communications & Allied Industries Pension Fund as the two founding shareholders — had attained such a feat.

The institution is expected to release its financial results for the 2019 next month.

RBZ governor John Mangudya said Metbank figures refer to preliminary investment figures in property which have not been audited and the central bank is awaiting auditors to confirm that position.

“The bank’s auditor’s should confirm that position,” Mangudya said.

In his Monetary Policy Statement, Reserve Bank of Zimbabwe governor John Mangudya said capital enhances a banking institution’s capacity to cushion against losses and on-going reviews of minimum capital levels ensure banking institutions continue to play a meaningful role and contribute to the economic turnaround strategies of the economy.

Mangudya said a strong capital base was pivotal to banking institutions’ ability to contribute meaningfully to economic growth and development through effective financial intermediation.

RBZ said the economy required significant investment to retool industry including funding road construction and electrical power production to facilitate industry activities.

Total banking sector deposits amounted to $34.50bn as at December 31, an increase of 103.66% from the ZWL$16.92bn as at June 30.

The increase in the deposit base during the period under review is attributable to rise in demand and foreign currency denominated deposits. The deposit base for the banking sector is dominated by demand and FCA deposits which accounted for 59.15% and 31.82% of the total non-bank deposits, respectively.