HARARE, July 3 (The Source) – Zimbabwe’s central bank says the financial services sector is now safe and sound after hitherto weaker Metbank boosted its capital position to $31 million from $24,6 as at December, surpassing minimum capital requirements.
The central bank on Friday announced that it had initiated several measures to ensure that the financial sector was free from distressed banks by June 30, 2015.
Early this year the Reserve Bank of Zimbabwe (RBZ) announced that Metbank and Tetrad Bank were undercapitalized but would not cause any systemic risk to the banking sector. Banks were given up to June to meet varying minimum capital requirements under a tier system.
Tetrad is currently under judicial management.
“Members of the public are advised that the financial condition of Metbank has improved following the implementation of various measures aimed at strengthening the bank’s capital and liquidity position,” the central bank said in a notice.
“These measures which included strategic realignment, balance sheet restructuring, liquidity mobilization and cost containment strategies, contributed to the increase in the bank’s core capital position to $31 million as at March 31 2015 which is now above the minimum core capital requirement of $25 million for the Tier II banks. The liquidity position has been enhanced through structuring of the liabilities of large creditors and discounting of borrowers receivables.”
These efforts, RBZ said, have also enabled the settlement of small depositors who are now being serviced normally.
The bank’s financial condition and the re-alignment towards the property development banking model is envisaged to further improve the institutions intermediation capacity, the apex bank said.
“Notwithstanding the developments relating to the two institutions, the stability of the banking sector has significantly improved and the sector remains safe and sound,” said RBZ.
“It is envisaged that the measures instituted by the Reserve Bank and initiatives being taken by banking institutions across the sector will continue to enable banks to underwrite more business and contribute to the growth of the economy.”