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Genesis saved from closure

Sources told the Zimbabwe Independent this week the Reserve Bank was on the verge of closing the struggling financial institution when a new investor came in.

Although the identity of the investor remained shrouded in secrecy at the time of going to print, British tycoon Nicholas Van Hoogstraten and wealthy businessman Frank Buyanga have been linked to the deal.

Buyanga, however, denied rescuing Genesis, saying he had only held talks with the bank with a view to investing in it but the negotiations collapsed. Van Hoogstraten was not available for comment.

Buyanga and van Hoogstraten have previously been linked to micro-finance institution Hamilton Finance, which made headlines last year for controversially selling properties that had been lodged as security by borrowers.

In his monetary policy statement presentation end of January, Reserve Bank governor Gideon Gono gave undercapitalised banks a two-month ultimatum to comply or face closure. Gono said there would be no further extensions after the March 31 deadline.

Gono proposed that banks which did not meet the regulatory minimum capital requirements –– US$12,5 million for commercial banks and US$10 million for merchant banks –– should consider mergers.

The central bank governor was not available for comment at the time of going to print. But last month he said Genesis had negative capital of US$3,2 million and was in negotiations with Swiss Charge of Zambia and a consortium of local investors to inject US$20 million as capital but the deal failed.

A consortium of investors led by FMB of Malawi previously tried to take over Genesis but this was also inconclusive.

As of December 2011, 20 out 25 banks had met the minimum capital requirements.

ZABG, which had a negative capital of US$15,35 million and Royal Bank  with US$3,42 million only managed  to  meet  the  threshold  early  this  month. New investors have since taken over ZABG.

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