Getbucks Financial Services says it is negotiating for a US$5 million recapitalisation to enable the bank to meet the required minimum threshold set by the Reserve Bank of Zimbabwe (RBZ).
According to the central bank thresholds, Tier 3 deposit-taking microfinance banks are required to have US$5 million minimum capital while Tier 1 banks, large indigenous commercial banks and all foreign banks are required to have US$30 million minimum capital.
Tier 2 commercial banks, merchant banks, building societies, development banks, finance and discount houses are required to have a US$20 million minimum capital
GetBucks company secretary, Michael Munemo, in a notice to shareholders said negotiations for a recapitalisation are still in progress, the full impact of which is still being determined and if successfully concluded may have a material effect on the price of the company’s securities.
“Shareholders are advised that the board of directors have since approved the recapitalisation which will result in the increase in capital of the Zimbabwean Dollar equivalent value of up to US$5 million at the prevailing Reserve Bank of Zimbabwe auction rate,” he said.
He added that advisors, an underwriter and other related parties have been identified and are in the process of being appointed.
“It is anticipated that a circular to members will be issued and a notice of an extra-ordinary General meeting of members will be published before the end of the first quarter of 2022.The transaction will be subject to all legal and regulatory approvals prior to the initiation of the process,” Munemo said.
The GetBucks Microfinance Bank Ltd is a Zimbabwe-based financial service company with operating segments that include Consumer Lending which provides individual public sector consumer loans. Small and Medium Enterprise (SME) Lending segment provides loans and other credit facilities for corporate clients.
The RBZ in its recent Monetary Policy Statement (MPS) extended to December 31, 2022 the deadline for non-compliant banks to meet the regulatory prescribed minimum capitalization levels largely due to the impact of the Covid 19 pandemic.
According to the MPS, out of 18 operating banking institutions, (excluding POSB with no minimum statutory requirement), 13 banks have complied with the new minimum capital requirement for their chosen capital tier segment.
Meanwhile, in the quarter ended 30 September 2021, Getbucks Microfinance Bank attained $167 million in total income, representing a 123 percent increase on the $75 million total income attained in the same period in prior year.
Profit after tax for the three-month period was $17 million, which was lower compared to the $29 million for the comparative period as a result of the increase in the rate of inflation as the quarter progressed.
The Bank’s loan book closed off at $202 million compared to September 2020’s $69 million due to increased funding lines.
Getbucks Microfinance Bank’s Limited’s inflation-adjusted regulatory capital for the period was $192 million.
Source: Business Weekly