ONCE again we are facing a bank crisis as shown by the report we are carrying on our front page in the midst of an economic malaise all along concealed by the multi-currency regime and exchange rate stabilisation since 2009.
Zimbabwe Independent Editorial
Since 2004, Zimbabwe has witnessed a series of bank collapses due to economic problems, liquidity crunch in particular, and gross mismanagement, including theft and abuse of depositors’ funds.
As usual, the banks affected are indigenous. This is not to say that there is something wrong with indigenous ownership of banks, but suffice to say most local banks are struggling.
And yet there is clamour in some misguided quarters to take over international banks despite clear signs this would destabilise the banking sector and unravel the gains of indigenisation made so far.
The latest problem at Kingdom Bank shows there is a deep-seated crisis in this sector. This is a reflection of the broad picture of inept political leadership and policy failures.
Zimbabwe is always hurtling from one policy to another due to lack of leadership and vision. Our rulers simply don’t know how to manage a modern economy and the consequences of their misrule are there for all to see.
Even the most blind of their apologists can see the ravages of their misrule.
Many may have by now forgotten about one Roger Boka, the first indigenous Zimbabwean to own a bank. He never worked in a bank before so as to understand the subtleties of running a financial institution.
However, to his credit the man was an outstanding businessman, a pathfinder of unequalled status.
He built a successful business empire that spanned commerce, agriculture and mining. Long before government ever thought of indigenisation, Boka had made his own forays. The Boka Tobacco Auction Floors are a living testimony to his entrepreneurship.
That was nearly two decades before government adopted its indigenisation policy, showing Boka was ahead of his time.
The Boka legacy, however, met its nemesis the minute his adventurous spirit led him to the heart of the financial services sector.
United Merchant Bank (UMB) became a misadventure that tainted his otherwise astounding business success. UMB collapsed like a deck of cards, never to recover. And so did the other UMB (Universal Merchant Bank).
Henceforth, a list of casualties followed, First National Building Society, Time Bank, Zimbabwe Building Society, Trust Bank, Royal Bank, Barbican, and others. Of course Trust and Royal made a comeback before Royal was closed again.
Trust, Royal and Barbican were eventually collapsed into ZABG before their assets were separated.
Fast-forward to the dollarisation era and yet some more collapses that included Renaissance Merchant Bank, Interfin and Genesis were recorded. Some of those clamouring for indigenisation of banks had interests in the collapsed institutions.
And yet, in this sea of financial turbulence, the international banks, Standard Chartered, Barclays, Stanbic and MBCA remain steady. CBZ, which at one time had some Absa shareholding, is a good example of local success though. These banks are doing well because of prudence.