BancABC raises US$50m

support the phenomenal growth it has registered in the last two years.
Group chief executive Mr Doug Munatsi said after the success of the rights issue ABCH would now shift its focus to raising between US$75 million and US$100 million tier two equity.
“This is a historic occasion for the group and positions us well for the future. The funds will be utilised for capitalisation of banking subsidiaries which have registered phenomenal growth in the last couple of years,” said Mr Munatsi.
ABCH said following this capital raise, all the banking subsidiaries will either be in the top tier or upper second tier of banks in the various countries in which the group operates.
Chief financial officer Mr Beki Moyo said the capital levels for the various subsidiaries would significantly increase the capital levels of the group’s banking subsidiaries.
BancABC Botswana will have US$53 million, BancABC Zimbabwe US$52 million, BancABC Mozambique US$32 million, BancABC Zambia US$26 million and BancABC Tanzania US$20 million.
All these banking operations are fully compliant with the regulatory minimum capital requirements.
The development puts BancABC Zimbabwe in good stead to meet the RBZ new minimum capital requirements.
Commercial banks are required to increase their capital thresholds from the current minimum capital threshold of US$12,5 million to US$25 million by December 31 this year, but the capital levels should reach US$100 million in two years.
Merchant banks will have to raise their capitalisation from US$10 million to US$100 million; building societies US$10 million to US$60 million while discount and finance houses will have US$80 million from US$10 million.
The minimum capital thresholds for asset management companies have been raised from US$1 million to US$5 million.
All institutions are obliged to meet 25 percent of the requirements by December 2012, 50 percent by June 2013, 75 percent by December 2013 and 100 percent by June 2014.
Presenting the Mid-Term Monetary Policy Statement, Reserve Bank Governor Dr Gideon Gono said increasing the capital levels was critical to ensure a stable financial system.
He said increasing the capital levels had been necessitated by the dynamic nature of the financial landscape, regulatory requirements, increase in competition and economic uncertainties, which have placed increased pressure on banking institutions to be adequately capitalised all the time.
There have been some major changes within the ABC shareholder base, which saw Germany-listed African Development Corporation taking a direct shareholding of 41,7 percent stake.
ADC has also reportedly agreed to warehouse additional shares as a financing mechanism for the executive management team.
As a result, its effective shareholding will be 50,4 percent.
The banking group said it was excited about the development, as it would result in alignment of interests between management and ADC, which is now the anchor shareholder of ABC Holdings.
BancABC is the brand name of ABC Holdings, which is registered in Botswana. It has a primary listing on the Botswana Stock Exchange and a secondary listing on the Zimbabwe Stock Exchange.