Metbank to raise US$25million

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Metbank Limited will next year raise US$25 million through a rights issue, a bank official said.

Chris Muronzi

Chairperson Wilson Manase told businessdigest this week that the financial institution had raised US$50 million in lines of credit, a move that is going to ease the bank’s liquidity situation going forward.

Manase said his bank hoped to raise US$25 million by end of the first quarter of next year.

The funds would be channeled into meeting statutory capital requirements, he said, adding another US$25 million would be raised by the end of the first half of 2015.

Metbank is among several local banks that have been affected by the worsening liquidity situation in the country. Most local banks have been hit by a myriad of economic problems.

A body representing financial institutions, Bankers’ Association of Zimbabwe (Baz), last month said growth in exports had remained low, averaging less than 1% on a monthly basis over the past year against a background of rising imports and low domestic industry production.

An expansion in imports against static exports means that the current account continues to widen and the economy is haemorrhaging. Banks said lines of credit remained limited and high priced due to the risk premium attached to the current external debt and arrears.

Zimbabwe has an external debt of US$10,7 billion.

The high risk premium on the external debt has become an albatross on the economy, the banks said.

Apart from liquidity challenges, the short-term nature of deposits has also become a headache for the sector.

According to Baz, 83% of total deposits are transitory.

Transitory deposits are funds held in bank accounts from which deposited funds can be withdrawn at any time without any advance notice to the banking institution. These can be “demanded” by an account holder at any time.

Banks also expressed worries over rising non-performing loans (NPLs).

Analysts feel banks are understating the level of non-performing loans in the sector amid anxiety banks are not providing adequately for bad loans.

Manase’s comments allay fears of a possible bank failure a week after the Reserve Bank of Zimbabwe revoked Trust Banking Corporation licence allegedly over allegations of abuse of depositors’ funds and violation of the Banking Act.

One thought on “Metbank to raise US$25million”

  1. Rutendo says:

    Met bank makaoma yeeeee

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