HARARE – Diversified financial concern Tetrad Holdings Limited (Tetrad) is in negotiations with foreign investors to access credit lines and funds to recapitalise its flagship unit Tetrad Investment Bank (TIB).
The bank’s capitalisation stood at $35 million as at June 30, 2013 ? below the central bank’s $50 million minimum capital threshold.
The group, which injected $15 million into TIB in October, said if successful, the discussions “should see the entity’s capital levels increasing.”
“…subsequent to the reporting period of March 31, 2013, the group also made a further capital injection of $8,6 million…,” it said in its financials for the half year to March 2013.
This comes as in August 2012, the Reserve Bank of Zimbabwe (RBZ) ordered banks to raise their minimum capital requirements to $100 million from $12, 5 million in phased manner.
In the first phase, whose deadline expired on December 31, 2012, commercial and merchant banks were supposed to increase their minimum capital to $25 million, then up it to $50 million by June 30 this year and $75 million by December 31.
The institutions should reach $100 million by June 30, 2014.
According to RBZ’s 2013 Monetary Policy, a total 14 banking institutions out of 21 complied with the initial phase.
This comes on the back of Tetrad’s plans to transform TIB into a commercial bank.
Recently, the group indicated that it was yet to get a licence from RBZ, applied for in 20111, to transform its investment bank into a commercial entity.
Meanwhile, during the period under review the group incurred a $2,9 million loss compared to $5,4 million profit recorded in the comparable period.
TIB made recorded an operating loss of $3,9 million compared to a profit of $724 122 in the comparative half year for 2012. A comprehensive loss of $8,3 million was posted for the half year in comparison to a comprehensive profit of $349 122 registered in the prior period.
Micah Moyo, Tetrad group chairperson said in the same period the bank’s total income declined by 18 percent from $4,2 million to $3,5 million, while operating expenses rose from $3,5 million to $4,6 million.
“A clean-up of the loan book has seen profitability reduced through provisions and suspended interest,” he said. “Despite expenses increasing on the back of the launch of commercial banking operations, management is still actively managing these to ensure cost efficiency,” said Moyo.
In the six months to June, the bank’s deposits grew by eight percent from $88 205 585 to $96 016 331.
Tetrad’s insurance arm — Tetrad Hail Insurance achieved an underwriting profit of $1,2 million during the period against $27 136 achieved prior year.
The group’s property division made a profit after tax of $641 159 compared to $469 798 achieved in the comparable period.
Tetrad’s asset management unit improved its loss in the half year by $173 278 to $95 411 from a loss of $269 139 made in March 2012.