(Bloomberg) -- Moza Banco SA, which collapsed after shareholders failed to inject capital into the business, will be stabilized and sold, the southern African country's central bank said.
“We hope that this process ends in six months, although it may go beyond," Joana Matsombe, a director at the Maputo-based regulator, told reporters in the capital on Monday. Moza Banco's solvency ratio dropped to zero, below the 8 percent required by regulators, who had to step in and replace the bank's management, she said.
Administrative costs that exceeded average expenses in the industry also contributed to the bank's collapse, Matsombe said. The country's banking system is stable, with an average capital adequacy ratio of more than 15 percent, she said.
“There is no reason for alarm,” Matsombe said. “There was a problem with this bank that might not be generalized.”
Prakash Ratilal, the former chairman of Moza Banco, said in an interview with STV, a local broadcaster, that the bank was hurt by the country's economic woes.
"It is the lack of capital, lack of liquidity, the economic situation of the country is very difficult,” he said. “Many companies are closing doors, there are also many companies that delay payment.”
To contact the reporter on this story: Borges Nhamire in Johannesburg at bnhamire@bloomberg.net. To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Vernon Wessels, John Viljoen
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