Kingdom shelves Zambia plans

Instead the group will now focus attention on improv-ing the fortunes of its struggling subsidiary Kingdom Bank Africa Ltd of Botswana (KBAL). Group chairperson Ms Sibusisiwe Bango indicated on Wednesday that Kingdom would redirect funds which had been earmarked for the Zambian venture to Botswana. She says KBAL has entered into a joint venture opera-tion with yet-to-be-named partners who will chip in with 27 mil-lion pula ($510 billion), before expanding the busi-ness into a large financial house. “Shareholders are advised that the capital that had been earmarked for re-investment in Zambia will now be chan-nelled to Botswana to bolster operations through the injec-tion of equity funding in KBAL,” said the chairperson. “In this regard, regulatory approval has already been secured.” Kingdom had planned to return to Zambia and set up a merchant bank before growing into a fully-fledged financial organisation, as the group readied to set foothold in a mar-ket in which it once had its fingers burnt. Kingdom pulled out of Investrust Bank of Zambia ear-lier last year after failing to shore up its stake to the desired 51 percent. KFHL has been in partnership with the Zambian bank for two years. Close to US$1 million – proceeds from the disin-vestment – had been mobilised for the Zambian rebound. In recent months, KBAL has not found the going easy. Mid-last year, the unit was placed under temporary man-agement of the Bank of Botswana after it plunged into a financial crisis. The unit needed a US$3 million capital injec-tion to boost its capital reserves. KBAL, which was anticipated to spearhead Kingdom’s regional expansion adventures, opened its doors to the bank-ing public in June 2003. Officials from the holding company indicated at the time that it would require an addi-tional US$3 million in reserves to bolster the division’s viability. KFHL had predicted the subsidiary would be recapi-talised from funds raised locally, but “this proved impos-sible when the foreign currency situation in Zimbabwe became critical and as a result the financial performance of KBAL was compromised”, it later admitted. KBAL offers institutional investors and medium-sized corporate advisory services, trade finance, bonds, money market, and equity instruments among other services. ‘

March 2006
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