HomeBusiness DigestMetropolitan's search for partner at advanced stage

Metropolitan’s search for partner at advanced stage

Roadwin Chirara

NEGOTIATIONS for the proposed recapitalisation of Metropolitan Bank (Metbank) are reported to have reached the final stages.

ns-serif”>The bank is reported to have found a single institutional investor to snap up its 30% stake on offer from the initial list of seven potential investors.

The list is reported to have featured four local institutions and three foreign potential partners.

Impeccable sources in the bank said the institution favoured a foreign partner over local investors because of the foreign currency component, which will be part of the deal.

NSSA is also reportedly keen on buying into the bank.

Metbank’s financial position has been of major worry in the sector after several banks collapsed because of liquidity problems in the past two years.

The situation at the bank resulted in the Reserve Bank forcing out founding chairman, Enock Kamushinda, in exchange for a $20 billion loan injection.

In an effort to meet its capital adequacy ratio, the bank also authorised a capital injection of $14,4 billion from its distributable reserves, while its share capital was increased to $30 billion.

Bank chairman, Justin Mutasa, in the group’s financial results to December 31 2004 noted that the bank’s capitalisation position was critical.

“My board has always considered the issue of capitalisation as critical,” said Mutasa.

He however said the bank’s capital adequacy ratio had surpassed the set ratios of 10%.

“The bank’s capital adequacy ratio stood at 18,6% which is well above the minimum prescribed rate of 10%,” said Mutasa.

He said the bank’s bad and doubtful debts in the year under review had increased significantly leading to the allocation of a prudent provision for its position.

He said the bank largely attributed its increase in revenue to significant interest income recorded in the first three-quarters of the year under review.

Metbank recorded net profit after tax of $8,5 billion with its total revenue increasing by 401% to end the year under review at $221,8 billion.

The bank’s major shareholders include Kamushinda through Blissford Investments with a 25% stake, Hatisburg Investment (25%), Costorphine Holdings (20%), Crudge Investments (25%), PTC Pension Fund (3%) and Metropolitan Bank Trust Fund (2%).

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