NMB Bank seeks more cash for capitalisation

Published: 08 August 2013

Banking group NMBZ Holdings says the US$16 million it obtained from three foreign banks during the first quarter of the year has enabled it to double the size of the bank and strengthened its ability to recapitalise the bank in line with the Reserve Bank of Zimbabwe's new minimum capital.

Officials within the bank told The Financial Gazette's Companies & Markets (C&M) that the new investment had doubled the size of NMB Bank, prompting it to seek more offshore funding to strengthen the group's balance sheet.

"The fresh capital has enabled NMB to grow, allowing us to seeking more lines of credit with which to tackle the insatiable demand that there is for appropriately priced debt of the correct tenor," an official said.

NMB Bank managing director Benefit Washaya told C&M that the bank was embarking on a number of projects to ensure it remain capitalised and solid but could not shed more light

"A lot is happening but you would understand we are in a closed period and as such cannot say anything until our financial result are out soon," Washaya said.

Three strategic foreign investors injected US$14,8 million into the group in exchange for 26,97 percent stake during the first quarter of the year. The investors are Tunisian-based AfricInvest Capital Partners, Dutch Development Bank (FMO) and Norfund which is a Nowergian development finance institution.

FMO has an investment portfolio of over €6 billion, making it one of the largest European bilateral private sector development banks.

Norfund is a development financial institution owned by the Norwegian government through its Ministry of Foreign Affairs.

AfricInvest invests jointly with FMO and has over US$700 million of assets under management.

This initiative by the board saw the bank raising equity capital of US$14,8 million and a further US$1,4 million in the form of seven year subordinated debt from Norfund, putting the total capital raise to US$16,2 million (The US$1,4 million debt was approved by the Reserve Bank of Zimbabwe as Tier II Capital)

C&M understands that NMB founder shareholders had agreed to be diluted significantly to allow more capital into the bank.

Due to the indigenisation regulations, the financial institution can no longer have more investors coming in as they have already reached the required 49 percent foreign ownership. The only option they have is to seek offshore credit lines.

Subsequent to the latest deal, the top five shareholders in NMBZ are African Century NNR (17,05 percent) Old Mutual (14,79 percent), AfricInvest, Norfund and FMO each holding 8,38 percent respectively.
- Financial Gazette