admincapital requirements.
The bank expressed confidence it will beat the deadline for regulatory capital threshold.
All commercial banks were required to have US$12,5 million minimum capital by September 30, last year, but the deadline was then extended to March this year and eventually September 30 in the case of a few banks that had not met the requirement.
The bank said discussions with potential investors were at an advanced stage and it was positive negotiations will be finalised by December.
Royal Bank, whose tier 1 capital comprising of share capital, share premium and accumulated losses stood at US$5,6 million in June, is racing against time to meet the central bank regulatory capital threshold.
Apart from negotiations with potential investors the bank said it was pursuing other capital-raising initiatives, which will boost its capital position.
“The board is confident that these will result in the bank meeting minimum levels of capitalisation of US$12,5 million ahead of September 30 2011 deadline that was given by the RBZ,” said Royal Bank.
Royal Bank has made a remarkable return to business since being placed under curatorship in 2002 and its amalgamation into the Zimbabwe Allied Banking Group in 2004.
It was relicensed in September last year and resumed operations in January this year after winning a Supreme Court case in which it disputed its closure.
The bank recovered all its assets and this enabled it to restart on a debt free position, which has made it possible to adopt strategies relevant to the market. It had opened 12 branches by May.
Since resuming operations Royal Bank has reported a comprehensive loss of US$1,5 million in the period to date of which US$900 related to pre-opening expenses of the bank.
Royal Bank chairman Dr Peter Chikumba said the bank is well geared for profitability considering a large part of its loss was incurred before it reopened.
“This could have been much more given that management was resuscitating an institution that had not been operating for six years,” said Dr Chikumba.
He was pleased that management had spent six months in a capital-intensive project, during which the bank re-established its head office.
This included rebuilding of the data centre where the bank’s back-up system and operational data for retail banking network is stored.
Royal Bank also optimised on recruitment, refurbished all the 12 properties nationwide, purchased suitable bank operating system, computers and other information communication technology-related hardware including networking equipment and outers.
The bank contends a radically different operating environment characterised by multiple currency and stable politics and growing informal sector businesses provide vast opportunities for growth.
The bank expressed confidence that inflation, which started the year at 3,5 percent before declining to 2,5 percent in May and peaking at 3,3 percent in July would close the year below 5 percent.
Online Reporter