BANK of Zambia deputy governor Dr Bwalya Ng’andu has apologised for the protracted restructuring process for Intermarket Banking Corporation which was repossessed last year on claims of insolvency.
Intermarket Banking Corporation has been turned into the Zambia Industrial Commercial Bank Limited (ZICB) with a total capital resource of K296.4 million, according to Dr Ng’andu.
“On opening its doors to the public, ZICB will be well-capitalised with sufficient liquidity to meet its obligations. The bank’s total capital resources before taking into account the accumulated losses will stand at K296.4 million, comprising actual cash injections of K228.4 million and deposit conversions amounting to K68.0 million,” Dr Ng’andu said during a meeting with interest groups on Tuesday.
He revealed that the accumulated losses were on account of ZICB assuming more liabilities than assets from IBC.
Dr Ng’andu said this translated into a regulatory capital position of K187.5 million, which is above the minimum primary capital requirement of K104 million for a locally owned bank set by the BoZ.
“Treatment of the Assets and Liabilities in IBC, ZICB will acquire some selected good assets and assume all the deposit liabilities of IBC. Since the other remaining assets in IBC will be mostly non-performing loans, the BoZ will place IBC under compulsory: liquidation,” he said.
Dr Ng’andu further added that IBC had a total of 66,164 deposit accounts.
“Under the proposed plan, up to a maximum of K200,000 will be paid on each deposit account. As the majority of IBC’s depositors hold balances below this amount, it is projected that 66,063 deposit accounts or 99.8 per cent of the total will be settled in full, leaving only 101 deposit accounts,” he said.
“Included in this number is NAPSA, the Madison Group and the Workers Compensation Fund, whose combined total deposit holdings accounts for a significant portion of the total outstanding amount.”
He appealed to depositors to retain part or all of their deposits with ZICB, although the new bank was ready to pay their money up to K200,000.
Dr Ng’andu added BOZ would finalize the restructuring plan which would be sent to each depositor and other creditors who would not receive full payment under the plan, giving them time to react to it.
“If the plan is supported by all interested parties, particularly two-thirds of the depositors and creditors by value, then ZICB will immediately finalise the arrangements for opening,” he said.
“The opening process of the new bank will be done in a phased approach as follows: ZICB will make payments to the depositors once the hearing and attendant processes explained above are fulfilled. We expect this to happen as soon as we obtain acceptance of the Plan by at least two-thirds of the depositors and creditors by value. ZICB management will in due course announce the official opening of the bank once all the logistical arrangements are completed as this is a new bank.”
Dr Ng’andu hoped that all interested parties would fully cooperate with the BoZ for the success of the restructuring process.