Genesis makes a small profit

Genesis Investment Bank which was placed under curatorship for six months from July to December still managed to make a profit of $154 million up from $121.3 million the previous year.

Interest and other income had shot up from $295.9 million to $1.2 billion but it was whittled down to $389.1 million after interest expenses rose from $124.4 million to $799.2 million.

Dealing profits declined from $17 million to $5.8 million while other income rose marginally from $72.1 million to $78.9 million.

The bank was placed under curatorship because of inadequate capital and corporate governance problems.

It says its capital inadequacy was caused by delays in transferring money meant for share capital.

This has since been rectified and it now has a capital adequacy ratio of 21.74 percent. The minimum requirement is 10 percent.

The bank was also rocked by governance problems. Some of the problems highlighted were that the bank had invested in bonds without board approval.

There had been some serious and improper insider transactions which benefitted executive directors or their companies.

There was poor communication between the board and management, and also evidence of management incompetence and misrepresentation or nondisclosure of information on asset swaps in some transactions.

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