First Mutual loses $1,8m to defunct banks

HARARE – Zimbabwe Stock Exchange-listed financial group, First Mutual Holdings Limited (FMHL), has lost $1,8 million to collapsed banks.

The group, which incurred a $4,1 million loss in the half year to June 2014 compared to a $2,4 million post tax profit realised in prior comparable period, said the funds were money market investments with the banks.

“Most of the money was in Capital Bank,” its chief executive Douglas Hoto told Business Live in a telephone interview.

“…only a small percentage was in another bank,” he added, but refused to disclose more “because the case is before the courts”.

He said the group will go out of its way to recover the funds.

This comes as numerous companies have lost significant sums of money to banks that have fallen by the way side due to inadequate capitalisation and high non-performing loans, among other challenges.

Two years ago, the National Social Security Authority lost $16 million in pensioners’ contributions to Interfin Bank after the financial institution collapsed.

Recently, the Reserve Bank of Zimbabwe cancelled Capital Bank’s operating licence, which had more than $39 million of a security scheme.

Meanwhile, FMHL incurred an overall investment loss of $1,7 million in the six months to June 2014, compared to a $7,5 million investment gain in the six months to June 2013. Business Live