SIX foreign-owned commercial banks that opted to covert as local entities after the Bank of Zambia (BoZ) increased the minimum capital threshold are expected to list on the local bourse, a central bank official has disclosed.
BoZ director bank supervision Gladys Mposha who could, however, not state when the named commercial banks will list on the Lusaka Stock Exchange (LuSE) said the financial institutions are currently working towards the listing process.
In 2012, BoZ increased the minimum capital requirement for local banks to K104 while the threshold for foreign banks was increased to K520 million to enhance the institutions capacity to support economic activity and to foster financial system stability.
“The six commercial banks met and exceeded the K104 million capital requirements, but are still in the process of transferring the majority equity stake to Zambian citizens through various means including private placement and stock exchange listing,” she said.
Out of the 19 banks, 14 banks operating in the country met the minimum capital threshold with six opting to localise while five failed to meet the threshold by December 31, 2013.
Ms Mposha said this in a presentation at the BoZ media training in Siavonga recently.
She said the five banks that failed to meet the December 31 deadline are expected to meet the threshold by next year.
“The banks agreed to individual deadlines but the period ends in 2015 at which they should have met the capital threshold. BoZ is constantly tracking progress [that] the banks are making towards meeting the capital requirement,” she said.
Meanwhile, Ms Mposha said Zambian banks have remained small compared to others in Africa due to the low level of capitalisation.
“Apart from playing a limited role in the financing of economic activities, Zambian banks have remained small…This is even true for the subsidiaries of some foreign banks incorporated in Zambia which are much bigger in other African countries than they are locally,” she said.
According to the 2014 banker magazine’s top 100 African banks, no Zambian bank has made it on the list.
Topping the charts in the Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC) are Angola and Kenya with nine banks each, South Africa with eight banks, Mauritius with six banks and Namibia with three banks.
Ethiopia, Mozambique and Tanzania have a bank each on the top 100 chart.
On the local front, Standard Chartered Bank Zambia Limited is the largest bank with capitalisation of about US$127 million as at December 31, 2013 while Stanbic Bank and Zanaco Bank Plc registered capitalisation of US$123 million and US$117 million respectively.
Others include Bank of China with capitalisation of US$104 million, Citibank with US$102 million, Barclays Bank with US$98 million, First National Bank with US$82 million and Indo-Zambia Bank with US$50 million.
BankABC and Finance Bank have capitalisation of US$48 million and US$42 million respectively.