$1bln moved offshore ahead of July polls

via $1bln moved offshore ahead of July polls 08/11/2013  by The Source NewZimbabwe

CLOSE to $1 billion was funnelled from Zimbabwe’s banking sector to offshore accounts in the run-up to the July 31 general elections as political uncertainty gripped the economy, worsening liquidity conditions in the market, a senior banking official has said.

President Robert Mugabe and his Zanu PF party claimed a resounding victory in the polls, a result which has been challenged by the Morgan Tsvangirai-led MDC in the courts.

“By the end of June $800 million left the country due to elections,” BancABC chief operating officer Francis Dzanya said during the banking group’s financial results presentation on Wednesday.

Dzanya added that the banking sector was battling worsening liquidity conditions.

The group’s chief executive, Douglas Munatsi said there was need to divert attention from the elections and focus on developing business.

“Whichever way things go, business needs to engage the new government,” Munatsi said.

Munatsi said he welcomed the pledge by Zanu PF to retain the multi-currency system and urged the new government to keep inflation in check and said there was also need for policy clarity on the indigenisation law which requires foreign companies to cede 51 percent to locals.

“We cannot run the US dollar economy like the Zimbabwe Dollar era. We need a disciplined approach to spending,” he said.

ABC Holdings attributable profits to shareholders grew by 155 percent to 143 million Botswana Pula for the year ended June 2013 from P56 million last year driven by the growth in retail banking. Total income for the period increased 47 percent to P701million driven by its operations in Botswana, Zambia and Zimbabwe.

“The good performance affirms the strategy that was taken a few years ago to convert the business from a purely wholesale bank to a universal bank,” Munatsi said.

Deposits increased to P10.9 billion from P10.7 billion last year.

BancABC Tanzania continued to pose major challenges for the group resulting in its balance sheet being recently restructured. All non-performing loans were warehoused in a non-bank subsidiary while fresh capital was injected into the operation.

“Therefore, the group is cautiously optimistic that its combined business in Tanzania will break even in the second half of 2013,” he said.

BancABC Botswana recorded an increase of 127 percent in attributable profits driven by an increase in net interest income from consumer lending and loan schemes in retail banking.

BancABC Mozambique’s profitability decreased 32 percent to P 9 million.

This was mainly due to an increase in impairments and higher operating expenses.  Banc ABC Zambia’s profitability grew 94 percent to P33 million.

BancABC Zimbabwe’s attributable profits of P48 million was lower than P50 million achieved in the prior year. This was mostly due to a P55 million impairment in respect of one unnamed customer.

 

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