ZABG asset base grows to US$40m

Nqobile Bhebhe
ZIMBABWE Allied Banking Group (ZABG)’s asset base has grown to US$40 million, largely due to financial injection from Trebo and Khays Limited, an investment vehicle owned by Mines and Mining Development minister Obert Mpofu’ family.
Trebo and Khays has 99,5% shareholding in the commercial bank.

 
In a statement attached to the group’s financial results, the bank’s CEO Stephen Gwasira told  shareholders the bank was currently capilatised to the tune of US$18 million, adding plans were under way to meet the newly-announced US$100 million minimum capital  requirements.

 
“The group’s total asset base grew by 153% to US$40 million, mainly from the capital injection by Trebo and Khays. Of note are the shareholders’ funds which grew from a negative US$10,4 million to a positive US$18 million from the capital injection,” said Gwasira.

 
He said net interest income declined by 24% against a backdrop of reduced loan underwriting capacity, leading to a 30% reduction in total income.
Mpofu bailed out the bank after agreeing to invest in it through an asset-backed transaction.

 
Mpofu’s injection rescued the bank from closure after it had battled to meet the US$12,5 million minimum capital requirement.

 
ZABG was created as a special purpose vehicle to facilitate the conversion of assets into equity of banks affected by the 2003-2004 banking crisis.

 
As at December 2011, ZABG was one of the four ailing financial institutions that had failed to raise the minimum capital requirement of US$12,5 million for commercial banks as stipulated by the RBZ.

 
At the end of last year, the bank had a declared core capital of minus US$15,3 million, which implied that incoming investors had to pour in more than US$15 million to stabilise it.  The bank has 21 branches countrywide.  ZABG this week announced  new board  appointments in line with the shareholder changes.

 
The new board would be chaired by lawyer Farai  Mutamangira and he would be deputised by Mark Wood, an associate and fellow of the Institute of Bankers. Mpofu’s wife Sikhanyisiwe is also a member of the board.

 
Other board members would include Graeme Mcintosh, Togarmah Dhlakamah, Abdullah Kassim, and Gwasira, an executive director.

 
Frank Karara has been appointed operations director, Ethel Chitanda finance director, while Florence Gowora is the business director.

 
The new board replaces the five-member board that was chaired by Alex Jongwe and included Lawrence Gudza, Jim Sanders, Jonathan Kadzura and Kasirai Kujinga.