Metbank to get $50m lines of credit

Metbank to get $50m lines of credit
Published: 06 December 2013
Metbank Limited's liquidity situation is set to improve as the local bank is on the verge of concluding lines of credit worth $50 million, chairman Mr Wilson Manase has said.

This is in addition to an option of raising $50 million through issuing shares and the board has since resolved to "broaden and hasten" the search for suitable investors.

Metbank is among several local banks that have been hit by the worsening liquidity situation in the country. Most local banks have severely suffered from dwindling industrial client activity and the subsequent impact on deposits.

In addition, the increase in withdrawals ahead of the festive season, in an environment which is already in a difficult money supply situation, has also caused a liquidity crunch which has exerted tremendous pressure on banks in general and on Metbank Limited.

Mr Manase said shareholders, board and the management were actively pursuing initiatives, a number of which have passed compliance stage, to resolve the bank's liquidity position.

"Metbank is working on a number of lines of credit, including one where Loita Capital with senior bank management are finalising a composite line of credit of $50 million, which follows the recently approved credit line of $10 million which the bank has been drawing down," Mr Manase said yesterday. "Several other initiatives are also underway to ensure the return of normal trading including aggressive loan recovery, asset disposal, and negotiating with clients for rescheduling."

Mr Manase acknowledged cash shortage had inconvenienced Metbank's clients and impaired relationships and "sincerely regret the limited access they have had to their funds and the anxiety and distress this has caused". "Nonetheless, our priority is to ensure all clients are paid on demand. General cash withdrawals, ZimSwitch, VISA and MasterCard services have been scaled down during this time," he said.

He added: "We are confident that with this blend of short to longer term initiatives, the support of the financial services regulator and that of our clients and workers' continued diligence, the situation can be gradually turned around and stability restored."
- herald
Tags: Metbank,


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