RESERVE Bank of Zimbabwe (RBZ) governor Gideon Gono has rated local financial institutions using the international standards Camel ratings for organisations that have not accessed the Tro
ubled Banks Fund (TBF).
The TBF was introduced in January and was supposed to expire last month.
It was however extended by the RBZ after several banks failed to pay up.
The facility was meant to cater for banks that were not in a sound financial position.
To-date six banks have used the facility.
According to documents presented to bankers by Gono a fortnight ago the governor rated commercial banks, merchant banks, building societies, finance houses and discount houses.
The meeting was called to give a status report on the financial institutions in the country given the recent clampdown by the central bank.
Gono noted that the problems in the banking sector could generally be linked to imprudent banking behaviour by the affected institutions.
The documents reveal that seven commercial banks – Barclays, Stanbic, Standard Chartered, Zimbank, Kingdom, NMB, and CBZ are in a “strong” position.
However both the Agricultural Bank of Zimbabwe and First Bank were rated to be in a “satisfactory” condition.
During the meeting Gono also revealed that the central bank was facing difficulties with the financial “services groups, particularly those with a single brand”.
He said the situation was “under review”.
Out of the six merchant banks operating, ABC and MBCA were rated to be in a “strong” position while CFX, Genesis, Interfin and Renaissance were given a “satisfactory” rating.
Since December last year the financial sector, which had appeared to weather the economic meltdown, began showing signs crumbling which had resulted in the sector undertaking massive retrenchments.
During the same time the central bank placed some firms under the management of curators.
Of the four building societies which did not access the TBF, Gono had different views on all of them, with the best-rated institution being Cabs which was given a “strong” rating.
Intermarket Building Society, which re-opened its doors to the public on Wednesday last week after having been placed under a curator was given a “no comment” rating.
Zimbabwe Building Society which survived largely because of the central bank’s intervention was given a “fair” comment.
Gono last week said the creation of the TBF was not intended to perpetuate the existence of these “life-boat operations” any longer.
“No central bank delights at the collapse of any financial institution in its backyard before all efforts are exhausted to save it,” Gono said.
Of the five finance houses that did not access the TBF, the Leasing Company of Zimbabwe, Trustfin and ABC were given a “satisfactory” rating.
The other two houses – Zimbabwe Development Bank and Sunpol were given a “fair” rating.
Out of the seven discount houses, three firms – ABC, Tetrad and Highveld were given a “satisfactory” rating. National Discount House and Premier Discount House were both given a “fair” rating.
Discount House of Zimbabwe was given a “strong” rating while Rapid Discount House was given a “critical rating”. Rapid was subsequently placed under a curator.
Other than the monetary policy requirements, banks are faced with capitalisation requirements which would see them paying $10 billion as paid-up capital.
Meanwhile, the Global Credit Rating has rated Kingdom as having an A1 and A for its long and short-term period.