RBZ blames poor corporate governance for bank failures

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THE Reserve Bank of Zimbabwe (RBZ) has blamed shareholder delinquency and poor corporate governance by directors and senior managers of banking institutions for bank failures following the collapse of eight institutions after the introduction of multi-currencies in 2009, a senior central bank official said yesterday.

Bernard Mpofu

Genesis Bank, Interfin, AfrAsia, Tetrad, Royal, Capital Bank, Trust and Allied all went under over the last six years with several reports pointing to poor corporate governance and mismanagement for their collapse.

RBZ-building

RBZ director in charge of supervision Norman Mataruka told delegates attending the Zimbabwe Independent Banks & Banking Survey glittering event in Harare yesterday that the banking sector remains generally safe and sound despite all the challenges they face. If you look at most of the banks that have actually closed, it’s because of only three factors: board and senior management, board and senior management and board and senior management!”

He said local banks are expected to fully comply with new RBZ minimum capital requirements by 2017 after registering a phenomenal 253% growth in net profit to US$86 million as at end of September, driven by growth in deposits.

The survey, carried out annually, is a partnership between the country’s leading business weekly the Zimbabwe Independent and content contributors, ZANJ Financial News (ZFN). The survey ran under the theme “Towards banking efficiency”.

“As you are aware, we increased the minimum capital to US$25 million for 2020 achievements — US$100 million for international banks and US$25 million for local banks. We are happy to note that most banks are actually going to meet these minimum capital requirements by 2017,” he said.

Under the ZFN Strongest Banks Model, Zimbabwe’s largest mortgage lender CABS was ranked the top performer for the second year running.

Stanbic was second-placed followed by Standard Chartered, FBC and Barclays respectively which were all recognised at the awards.

The financial services sector, Mataruka said, is adequately capitalised with a capital base of US$916,81 million as at September 30 2015, and an average capital adequacy ratio of 21,50%, against the regulatory threshold of 12%.

“The sector remained profitable during the period ended 30 September 2015, with an aggregate net profit of US$86,09 million, compared to US$24,35 million recorded in the period ended 30 September 2014,” Mataruka said.

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