admincloser. Commercial banks will be required to have a minimum capital base of US$50 million by end of June.
Without disclosing how much the company intends to raise, the group said it would be a combination of a rights issue to the existing shareholders and an offer of shares to new investors.
“AfrAsia Kingdom Zimbabwe advises its shareholders that it is embarking on an exercise to raise more capital in line with the Reserve Bank of Zimbabwe regulatory requirements,” the group said.
“It is likely that this process will incorporate a rights issue to existing shareholders and an offer of shares to new investors. Cornerstone shareholder AfrAsia Holdings Ltd has committed to following its rights in any capital raising and discussions with potential new investors are already at an advanced stage.” The group said it would approach shareholders seeking approval.
Last year, AfrAsia Bank Limited acquired a 35 percent stake in Kingdom Financial Holdings Limited.
Last year, the central bank raised minimum capital thresholds for commercial and merchant banks from US$12,5 million and US$10 million to US$100 million for both sets.
Minimum capital requirements for building societies were also increased from US$10 million to US$80 million, finance and discount houses from US$7,5 million to US$60 million and US$1 million to US$5 million for micro-finance institutions.
These institutions should be fully compliant by June 2014, but were required to meet 25 percent of the new capital levels by the end of last year. They should be 50 percent compliant by June this year. The financial institutions are further required to be 75 percent and 100 percent compliant by December 31, 2013 and June 30, 2014 respectively.
Last year, AfrAsia Bank Limited acquired a 35 percent stake in Kingdom Financial Holdings Limited.
While it has been too difficult for most banks to meet the US$25 million thresholds, analysts sees most banks struggling to reach the US$50 million mark, a development that is likely to trigger mergers.
Online Reporter