AfrAsia Bank Zimbabwe Limited in liquidation pays $2.95 mln to insured preferred creditors

AfrAsia Bank Zimbabwe Limited in liquidation pays $2.95 mln to insured preferred creditors


HARARE, Defunct AfrAsia Bank Zimbabwe Limited has to date paid its preferred creditors $2.95 mln through two interim dividend payments and anticipate a third dividend payment during Q1 2018.

The Reserve Bank of Zimbabwe cancelled AfrAsia Bank Zimbabwe Limited (formerly Kingdom Bank)’s licence in 2015 after it failed to meet minimum capital requirements and bowed to undercapitalization problems. At closure, Afrasia was exposed at over $20 mln.

In an update, Liquidator, Regie Saruchera said legal proceedings and the illiquid market have continued to impede the anticipated timing of the liquidation distributions.

“To date, two interim dividends amounting $2.95 million have been paid to preferred creditors only. Currently we are working on transactions which if concluded a dividend of between 10 and 15 cents per dollar may be paid out,” he said.

He said due to these developments the third interim dividend is likely to be paid in the first quarter of 2018 to concurrent/unsecured creditors after all preferred creditors have been paid.

Meanwhile, the Deposit Protection Fund (DPC) is in the process of compensating depositors of several other failed banks.

As at April 2017, DPC had exposure of $6.4 million to six failed banks the corporation had by April 2017 paid out a total $3.2 mln to insured depositors at a cover level of $500 per depositor.

According to DPC, payments to depositors take place on two fronts which are under the Deposit Protection Fund up to the prevailing cover level; and the Liquidation Dividends on a pro-rata basis depending on the recoveries.

When a bank shuts down, all clients are paid a maximum of $500 immediately when they submit a claim form. And in the event a client has over $500 in the account, the DPC pays an initial deposit of $500 while the balance is paid through the liquidation process.