Mpofu’s struggling bank on the brink

via Mpofu’s struggling bank on the brink 16/02/2014 by Staff Reporter NewZimbabwe

ALLIED Bank, which is owned by Transport Minister Obert Mpofu, is planning to approach investors for fresh capital as it teeters on the brink of collapse.

According to the Herald newspaper: “The bank will flight a public notice inviting investors willing to inject fresh capital into the bank for some shares and this should be done in the next few weeks.

Allied bank was handed to Mpofu in 2012 by former central bank governor Gideon Gono after the Zanu PF official, said to be one of the country’s richest ministers, reportedly injected about $23 million to help re-capitalise the institution.

Gono confirmed the transaction saying Mpofu effectively rescued the bank from possible collapse after it had struggled to meet new minimum capital requirements.

“Dr Obert Mpofu who came forward with his money and sought permission to take over ZABG bank which was ailing then is a case in point,” RBZ chief Gideon Gono said in March last year.

“We gave him two years within which to regularise the ownership structure of that bank to a maximum of 25 per cent for any single shareholder which he committed to do but for the time being he has put in money and is a 99,9 per cent shareholder.”

However, Mpofu has failed to inject more money into the bank which was one of the institutions worst affected by cash shortages in December leading to clashes with depositors at its branches around the country.

According to the Bulawayo-based Southern Eye newspaper, Mpofu’s rescue deal of 2012 was not based on cash.

A confidential report by the Reserve Bank of Zimbabwe seen by the newspaper read: “The bank’s reported core capital declined from $12,59 million as at August 2013 to $11,18 million as at September 2013 due to persistent losses that the institution continues to incur.

“The properties contributed as capital by the major shareholder are yet to be transferred into the bank’s name, notwithstanding the waiver granted by Zimra (Zimbabwe Revenue Authority) on the payment of capital gains tax.