This follows last week's completion of a P375 million ($50 million) of a rights issue, which raised funds to re-capitalise the bank's operations in the five southern African countries it has branches."This is a historic occasion for the group and positions us well for the future. The funds will be utilised for the capitalisation of the banking subsidiaries which have registered phenomenal growth in the last couple of years," Group CEO Douglas Munatsi said in a statement. Following the conclusion of the rights issue, there has been major changes within the shareholder base which has seen German listed African Development Corporation (ADC) taking a direct shareholding of 41.7 percent. In addition, the company says that, ADC has agreed to warehouse additional shares, as a financing mechanism for the executive management team, which will effectively take its shareholding to 50.4 percent.
"Retail banking is not only a people and systems intensive business but it is also capital hungry. Now that the first phase of capitalization is behind us, we intend to raise an additional US$75 million - $ 100 million by way of tier two equity, to further bolster the operations," Munatsi added. Following the rights issue, capital levels for the various subsidiaries have been increased to BancABC Botswana ($53 million), BancABC Zimbabwe ($52 million), BancABC Mozambique ($32 million), BancABC Zambia ($26 million) and BancABC Tanzania ($20 million).From the P375 million ($50 million) raised, P110 million ($15 million) will be channelled towards the local subsidiary to fund its fledgling retail business which has experienced a phenomenal 500 percent growth in its customer base from 1,500 clients in 2010 to 9,500 in 2011. However, this growth - which has resulted in the group's balance sheet rising to P9.2 billion from P6 billion in 2010 - had not been supported by injection of additional capital, resulting in capital adequacy ratios for the bank sliding down to near regulatory minimums.
