Foreigners snap up Zim banks - Zimbabwe Situation

Foreigners snap up Zim banks

via Foreigners snap up Zim banks – DailyNews Live  18 MARCH 2014 

More Zimbabwean banks are increasingly becoming foreign-owned despite government’s aggressive indigenisation programme, the Bankers Association of Zimbabwe (Baz) has said.

Although President Robert Mugabe’s administration has vowed to have the financial sector indigenised, locals lack capital, resulting in the institutions falling in foreign hands following bail out deals.

Apart from several ultimatums, former Indigenisation minister Savior Kasukuwere threatened to evict the foreign banks for failure to comply with the empowerment law, compelling foreigners to cede majority shareholding to black locals.

Baz president George Guvamatanga recently told Parliament that the Reserve Bank of Zimbabwe (RBZ)’s move to increase banks’ minimum capital requirements from $12,5 million to $100 million has seen more local financial institutions seeking offshore capital.

“We used to have three or four foreign-owned banks before the (Indigenisation) Act came into effect, but now two or more banks are now majority owned by foreigners,” he said.

Zimbabwe currently has 21 banks, 16 locally-owned while five are majority owned by foreigners.

“We strongly believe that Zimbabweans should own shares in banks, but where we are today, with the requirement for more capital in banks, it would be difficult for locals to raise $100 million,” he said.

In 2010, Togo-based Ecobank International acquired a nearly 70 percent stake in Premier Bank resulting in the rebranding of the financial group to Ecobank Zimbabwe Limited.

Last year, Mauritian AfrAsia Bank Limited increased its shareholding in then Kingdom Financial Holdings Limited to over 50 percent after acquiring its founder, Nigel Chanakira’s, 33 percent stake.

The group has since been renamed to AfrAsia Zimbabwe Financial Holdings.

Trust Holdings Limited — owners of Trust Bank, before the cancellation of its operating licence last December, was on the verge of concluding a multi-million dollar deal with a South Africa-based company Mining, Oil, and Gas Service.

The deal would have seen the Royal Bafokeng investment firm acquiring a majority stake in the financial institution.

Recently, Allied Bank, battling to raise $30 million in fresh capital to meet central bank’s requirements, announced it is in negotiations with a Mauritius-based consortium for a bail out and subsequent acquisition of more than 70 percent shareholding in the financial institution.

In 2012, the central bank increased minimum capital thresholds as part of efforts to curb systemic risks and ease the liquidity crunch in the economy.

The deadline was, however, later extended to December 2020 after many banks showed signs of strain due to lack of capital in the country.

Economic experts say Zimbabwe’s adoption of the multi-currency system in 2009 and the absence of the central bank in the market as a lender of last resort have contributed to the acute liquidity crisis being experienced in the country.

Guvamatanga noted that it would be prudent for locals to increase their shareholding in financial institutions but the pressure to meet the minimum capital requirements is forcing banks to seek offshore capital.

MBCA, Standard Chartered, Barclays Zimbabwe and Stanbic are some of the banks in the country that are majority owned by foreigners.

 

COMMENTS

WORDPRESS: 6
  • comment-avatar
    John Thomas 4 years

    At least with an international bank you might be able to get your money when you want it. With these Zimbabwean banks this has not been the case. The corrupt class will strip any asset that comes within their grasp.

    • comment-avatar
      Fallenz 4 years

      Yeah, with the threat that the Reserve Bank could require deposits to be transferred there, only a gambling addict would infest… I’d sooner bet on a roulette wheel.

      I keep a 100 Billion Agri-cheque in my pocket just to keep me reminded.

  • comment-avatar

    hear, hear, I keep my money in a safe place and it is not called a bank. At least I can get to my money whenever I want/need it.

  • comment-avatar
    easily fooled 4 years

    It high time the central bank must also cede 51 percent to the Federal Reserve Bank so as to empower it function of lender of last resort. Its funny to me that the central bank insist that banks must operate in line with best practice when infact RBZ does not. It is no more incharge of the money market, does not own any financial assets to trade in the money market; helpless on liquidity; more corrupt than executives of banking institution thus Kereke v Gono is a central reference.

  • comment-avatar
    just saying 4 years

    We desparately need investment so let’s celebrate that at least we will have banks that are well run where we can be sufficiently confident that we can access our hard earned money when we need to. By the way what has happened to the owners of collapsed indigenous banks? Nothing of course as some of us are more equal that others.

  • comment-avatar
    Nyoni 4 years

    You Zanu are truly stupid for sure. You are using other currencies than our own and you are crying for Indeginisation.Have you not realised foreign money is keeping you afloat. Let them open their banks it has worked well in the past why change it now. Think of something else more original and keep your grubby hands of other peoples property idiots