Allied Bank has surrendered its operating licence to the Reserve Bank of Zimbabwe, becoming the first bank to go under this year after its core capital deteriorated, a senior central bank official has confirmed.
“The bank has surrendered its licence after struggling to become viable since the introduction of the multiple currencies,” the source said.
Transport Minister Obert Mpofu is the majority shareholder in Allied Bank, which emerged from the ashes of the Zimbabwe Amalgamated Banking Group – which was created by the central bank in 2004 to warehouse the assets of three troubled banks.
Allied is one of the seven financial institutions that were placed under increased central bank monitoring in 2014 as its core capital position weakened.
“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,” said a Reserve Bank report then.
“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. There has been no progress made in the bank’s recapitalisation initiatives.”- The Source
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