Moza (formerly Moza Banco) was put under administration by the Mozambican central bank to secure the interests of depositors, taking into account the bank’s solvency ratio was below zero, said recently the director of the Bank of Mozambique, Joan Matsombe.
The solvency ratio is the ratio of the assets of a company funded by equity and financed by borrowed capital, so the higher this indicator the better the company’s financial stability and the lower the solvency ration the more vulnerable the company is.
In a statement issued in Maputo, the Bank of Mozambique said it had decided to suspend the members of the board of directors and the executive committee of the bank and appointed a provisional board led by João Figueiredo, whose mandate will last until the situation is returned to normal.
The central bank said it needed to protect the interests of depositors and other creditors, and to safeguard the normal operation of the banking system.
The director of the Bank of Mozambique said that the central bank has a facility for cases where banks experience some liquidity difficulties but added that for this facility to be used institutions must comply with certain requirements, one of which is a minimum solvency ratio of 8%.
The main reason for the bank’s instability was the fact that its capital increase, decided when the capital ratios of the bank began to deteriorate, was not performed in its entirety but only at 80%.
Moza, which started operations in 2008, is 51% controlled by Moçambique Capitais and the remaining 49% is held by Novo Banco, the bank that kept the healthy assets of the bankrupt Banco Espírito Santo (BES). (macauhub)