RBZ cancels Allied Bank licence

Allied Bank is among six banks that failed to meet minimum capital requirements by September 30 last year

Allied Bank is among six banks that failed to meet minimum capital requirements by September 30 last year

Business Reporters
ALLIED Bank has surrendered its licence to the Reserve Bank of Zimbabwe after failing to raise the minimum capital prescribed by the central bank. In a statement, the Reserve Bank of Zimbabwe said it had cancelled Allied Bank Limited’s licence in terms of Section 14 (4) of the Banking Act [Chapter 24:20]. The cancellation followed a voluntary surrender of the licence by the banking institution.

“The Reserve Bank has determined that the banking institution is no longer in a safe and sound condition in that the institution is grossly undercapitalised and is facing chronic liquidity challenges.”

The Reserve Bank will apply for the liquidation of the institution in terms of Section 57(1) (a) of the Banking Act.

Allied Bank is among six banks that failed to meet prescribed minimum capital levels by September 30 last year, according to RBZ.

It had core capital of $3,14 million, far below minimum capital level of $25 million.

No comment could be obtained from Allied Bank at the time of going to press yesterday.

Two weeks ago, the central bank announced that it was not extending the curatorship period of another troubled bank, Interfin Bank Limited, and would liquidate it.

The RBZ said the primary purpose of placing the banking institution under curatorship was to protect depositors and preserve assets of the banking institution, with the intention of resuscitating the banking institution and make it a viable concern.

The initiatives taken by the curator to resuscitate Interfin Bank were fruitless. A total of 12 potential investors were considered, but none of the proposals put forward yielded positive results. This resulted in the institution’s condition continuing to deteriorate.

“The Reserve Bank determined that it was no longer feasible to resuscitate the bank as a viable concern as all efforts to recapitalise the banking institution have yielded no positive results and any further extension of curatorship would only further prejudice depositors and creditors,” the central bank said in a statement recently.

Some the distressed banks, which occupy insignificant market shares in terms of loans, deposits and assets include Metropolitan Bank, AfrAsia Bank and Tetrad Investment Banking.

As at September 30, a total 14 out of 20 operating banking institutions were in compliance with the prescribed minimum capital requirements, the central bank said in its quarterly industry report.

It said some non-compliant banks were taking measures to regularise their capital positions and were at different implementation stages.

Recently, AfrAsia said it had engaged local finance group Imara Capital Finance to jointly market a Medium Term Secured Note, which is expected to generate an incremental $15 million.

In a joint update to stakeholders on December 19, AZHL Group chief executive Ms Lynn Mukonoweshuro and AfrAsia Bank Limited CEO Mr James Benoit said several prospective investors had also expressed interest in injecting equity investment into AZHL/ABZL.

Pin It