Genesis director Chibaya quits

GENESIS Investment Bank Managing Director Fulton Chibaya has resigned from the bank, businessdigest has established.

His resignation comes at a time when the bank was battling to meet statutory minimum capital requirements.

Contacted for comment on Monday, Chibaya confirmed he had left the bank but denied being pushed out.
“I resigned from the bank to pursue other interests. If you want more information you can talk to the chairman,” said Chibaya.

Acting head of marketing Samere Mugabe, told businessdigest that Chibaya had left the bank but there was nothing sinister about the development.
“He (Chibaya) left the bank to pursue other interests on July 9. Bright Mayere is the acting CEO at the moment,” said Mugabe.

Asked why the bank had not advised the market, Mugabe said an official statement would be made “soon”.
Chibaya left last week at a time when the merchant bank failed to meet statutory minimum capital requirements of US$10 million as required by the Reserve Bank of Zimbabwe.

In the past two years, senior executives have left the bank. Former Head of Treasury, Daniel Gwira left for CFX Bank, former Head of Marketing, Gerald Chinogara left for Afre while former Head of IT Kingston Kanyile also left the bank.
Genesis Bank, a subsidiary of Genesis Financial Holdings Ltd, was set to commence commercial banking operations after it was granted a licence by the Reserve Bank two years ago.

Genesis Financial Holdings is also a subsidiary of diversified insurance concern Zimre Holdings Ltd. Genesis Investment Bank was initially established as an accepting house.

ZHL CEO Albert Nduna was quoted in the media saying; “We are in the process of acquiring US$12, 5 million to meet Reserve Bank of Zimbabwe’s minimum capital requirements before we can start operations.”

“We are hoping to get some of the funds from our regional operations since they are performing well,” he added.
Nduna said the group was also looking for a suitable site to build the bank’s premises. The accepting house currently operates from Zimre centre in the capital.

If Genesis Investment Bank is transformed into a commercial bank, it will join 15 other institutions on the market.
Zimbabwe has 15 commercial banks, six merchant banks and four building societies.

Due to financial problems, banks have been struggling to meet capital adequacy requirements even after the central bank came up with a phased plan. By September 30 last year they were supposed to have paid half the amount and the balance by March 31.

According to the Reserve Bank, as at May 31 2010, 15 out of 25 banking institutions had complied with paid-up capital requirements which are US$12, 5 million for commercial banks and US$10 million for merchant banks and building societies. Asset management companies are required to have a capitalization of US$500 000.

Currently, many banks are struggling for survival due to various problems dogging them in the market. Some of the problems facing the banking sector include liquidity constraints, volatility of deposits, cash-based transactions due to lack of alternative means of payment, high overhead costs against a background of low income generation capacity, lack of lines of credit and the failure of the central bank to act as a lender of last resort due to bankruptcy.

Liquidity problems are mainly caused by poor export performance and lack of international capital inflows. Lack of lines of credit and donor support also compound the problem.

The Reserve Bank’s inability to offer lender-of-last-resort facilities has exacerbated the liquidity crisis in the economy and the banking sector in particular. As a result of this, there is no active inter-bank market where banks, which have no acceptable collateral instruments, can borrow to cover their liquidity gaps.

Paul Nyakazeya