Zimbabwe: Banking sector safe after MetBank increased capital requirements, says RBZ
The governor of the Reserve Bank of Zimbabwe said the bank's core capital position had increased to $31 million.The governor of the Reserve Bank of Zimbabwe (RBZ) John Mangudya said that MetBank's core capital position had increased to $31 million (€28.2 million) as of March 31 2015, above the minimum core capital requirements of $25 million.
This comes after the bank was given in January a June 30th deadline by the central bank to shape up.
Mr Mangudya said the bank had undertaken a number of measures such as strategic realignment, balance sheet restructuring, liquidity mobilisation and cost containment strategies which resulted in the increase of the bank's core capital, The Standard reports.
"The stability of the banking sector has significantly improved and the sector remains safe and sound", he said in a note.
This announcement comes after fresh data from the RBZ revealed a rise in loan impairments, which fuelled fears that banks may cut back on lending critically needed to reboot the economic sectors,
MMC Capital research analyst Kudzanai Samudzi told The Standard impairments went up because the capacity of borrowers to repay loans was waning as the obtaining environment remained a challenge.
"There is an urgent need to siphon out a greater portion of bad loans in all the banks, hence creating a much cleaner consolidated balance sheet for the local banking sector. This development will be key in reducing risks," he said.