The Sunday News
Wilson Dakwa, Business Reporter
THE Deposit Protection Corporation (DPC) has paid two interim dividends of about $3 million to AfrAsia Bank Zimbabwe, formerly Kingdom Bank creditors.
In a statement on AfrAsia Bank Zimbabwe liquidation, DPC said legal proceedings and the illiquid market had slowed down the anticipated timing of the liquidation distributions.
“To date, two interim dividends amounting to $2.95 million have been paid to preferred creditors only. In reference to our last update which anticipated a dividend payout during the second half of 2017, we would like to update that, legal proceedings and the illiquid market have continued to impede the anticipated timing of the liquidation distributions.
Currently we are working on transactions which if concluded a dividend of between 10 and 15 cents per dollar may be paid out,” read part of the statement.
DPC said the third interim dividend is likely to be paid in the first quarter of next year to concurrent or unsecured creditors after all preferred creditors have been paid.
AfrAsia Bank Zimbabwe was founded as Kingdom Financial Holdings in 1994. In February 2015, the Reserve Bank of Zimbabwe cancelled the bank’s operating licence after determining that the financial institution was no longer in a sound financial condition.
The bank reported high levels of non-performing loans which increased from 13 percent in 2012 to 82 percent in 2015 which led to severe liquidity challenges and hampered its ability to write new business. The High Court placed the bank under final liquidation on 29 April last year.
The closure of several local financial institutions due to a combination of the harsh economic environment, corporate governance failures and mismanagement left numerous depositors and creditors in the lurch.
DPC was mandated to reimburse depositors as a result of bank closures.
It was appointed liquidator of six failed contributory institutions currently in final liquidation; as well as provisional judicial manager of one failed institution in provisional judicial management. The institutions being liquidated include AfrAsia Bank Zimbabwe, Allied Bank Limited, Trust Bank Corporation Limited, Interfin Bank Limited, Royal Bank and Genesis Investment Bank.
Meanwhile, as of 30 June 2017, 11 667 out of 54 909 depositors were compensated. In monetary terms, about $3.2 million (50 percent) were paid against an exposure of $6.4 million.
@WilsonDakwa1
