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Banking Industry Zimbabwe

The Banking Industry in Zimbabwe 2020

Louise Mitchell | Zimbabwe | 26 February 2020

The Banking Industry in Zimbabwe 2018

Louise Mitchelle | Zimbabwe | 23 March 2018

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Report Coverage

This report on The Banking Sector in Zimbabwe includes commercial banks, merchant banks and building societies, the central bank, development finance institutions, and other credit granting facilities including microfinancing. It includes the latest available information on the state and size of the sector and factors that influence it such as the change in the currency and inflation. There are profiles of 24 companies including the Reserve Bank of Zimbabwe, commercial banks such as CBZ and Ecobank, microfinance banks such as GetBucks and development finance institutions including the Infrastructure Development Bank.

Introduction

The report on the Zimbabwe banking industry covers deposit-taking institutions which include other credit granting, lease financing, and loyalty and reward programmes. Central banking is included. Total banking sector assets increased by 74.1% from US$23.54bn at 30 June 2019, to US$40.99bn at 30 September 2019 due to revaluation of investment properties and foreign currency denominated loans that were influenced by exchange rate movements of the Zimbabwe dollar against the US dollar. Even though competition in the sector is increasing, the performance of industry players is constrained by the slow economic growth. The re-introduction of the local currency did not bring relief for the struggling economy – it exacerbated cash shortages and hampered trade.

Strengths

• Agency banking is breaking down barriers to financial inclusion such as cost and accessibility.
• Banks’ performance indicators are showing improvement owing to non-performing loans that are taken over by the Zimbabwe Asset Management Corporation.
• Competition is increasing as market concentration is reducing.
• Government support of microfinance institutions is contributing towards more loans to SMEs, women and youth.
• The Banking Act provides for stringent bank supervision, monitoring and control.
• The deposit protection scheme enhances consumer protection in the event of bank insolvency.

Weaknesses

• Cash shortages are prohibiting growth in loyalty programmes with limits imposed on pay outs for cashback.
• Investment in technology by commercial banks is increasing operating costs.
• No digital banks have entered the market.
• No Islamic banking services are offered.
• No new foreign banks are entering the market.
• Regional disparities are high and the largely unbanked rural population has limited access to financial services.
• The re-introduction of the local currency affected money supply and the economy.

Opportunities

• Cash shortages are accelerating growth in mobile banking.
• Further increases in mobile banking will facilitate growth in financial inclusion.

Threats

• Increasing card fraud is threatening profitability.
• Increasing cyber-attacks on banks.
• Rising consumer prices and inflation impact on customers’ ability to save.
• The cash shortage poses a major threat to the operability of banks.
• The large fiscal deficit threatens bank liquidity.

Outlook

Digital transformation, investment in ICT capabilities and strengthening compliance and risk management frameworks will remain the key enablers of banking institutions. Role players expect short- to medium-term adverse liquidity conditions and high inflation, exacerbated by the foreign currency shortages, as government continues to pursue aggressive monetary reforms aimed at normalising the economy. These conditions will result in balance sheet contraction. Banks will put measures in place to preserve capital, which might lead to smaller loan books and lower income. Some role players expect growth in the SMEs sector of agriculture and mining and have a long-term focus on commodities financing that would contribute towards sustainable economic growth.

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The Banking Industry in Zimbabwe
The Banking Industry in Zimbabwe 2020

Full Report

R 1 900.00(ZAR) estimated $103.00 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.10 (USD)*

Historical Reports

The Banking Industry in Zimbabwe 2018-03-23

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. COUNTRY INFORMATION 1
3. DESCRIPTION OF THE INDUSTRY 2
3.1. Industry Value Chain 7
3.2. Geographic Position 8
4. SIZE OF THE INDUSTRY 8
5. STATE OF THE INDUSTRY 12
5.1. Local 12
5.1.1. Corporate Actions 18
5.1.2. Regulations 19
5.1.3. Enterprise Development and Social Economic Development 22
5.2. Continental 24
5.3. International 29
6. INFLUENCING FACTORS 32
6.1. Economic Environment 32
6.2. Financial Inclusion 33
6.3. Operating Costs 34
6.4. Information Technology (IT), Research and Development and Innovation 35
6.5. Labour 35
6.6. Cybercrime and Fraud 36
6.7. Environmental, Social and Governance (ESG) Factors 37
7. COMPETITION 37
7.1. Barriers to Entry 38
8. SWOT ANALYSIS 38
9. OUTLOOK 39
10. INDUSTRY ASSOCIATIONS 40
11. REFERENCES 40
11.1. Publications 40
11.2. Websites 41
APPENDIX 1 43
Summary of Notable Players in all sub-Sectors of the Banking Industry 43
COMPANY PROFILES 46
AFRICAN CENTURY LTD 46
AGRICULTURAL BANK OF ZIMBABWE LTD 49
BANCABC ZIMBABWE LTD 53
CBZ HOLDINGS LTD 56
CENTRAL AFRICA BUILDING SOCIETY 60
ECOBANK ZIMBABWE LTD 64
FBC HOLDINGS LTD 67
FIRST CAPITAL BANK LTD 71
GETBUCKS MICROFINANCE BANK LTD 76
INFRASTRUCTURE DEVELOPMENT BANK OF ZIMBABWE 79
LION MICROFINANCE LTD 82
METBANK LTD 83
MICROPLAN FINANCIAL SERVICES (PVT) LTD 86
NATIONAL BUILDING SOCIETY LTD 89
NEDBANK ZIMBABWE LTD 92
NMBZ HOLDINGS LTD 96
PEOPLE'S OWN SAVINGS BANK (THE) 101
RESERVE BANK OF ZIMBABWE 106
SMALL AND MEDIUM ENTERPRISES DEVELOPMENT CORPORATION (THE) 109
STANBIC BANK ZIMBABWE LTD 111
STANDARD CHARTERED BANK ZIMBABWE LTD 116
STEWARD BANK LTD 120
SUCCESS MICROFINANCE BANK LTD 122
ZB FINANCIAL HOLDINGS LTD 124

Introduction

The report on the Zimbabwean banking industry covers deposit-taking institutions which include other credit granting, lease financing, and loyalty and reward programmes. Central banking is included. Total banking sector assets grew by 9.6% from US$10.26bn in September 2017 to US$11.25bn at 31 December 2017. The multi-currency system that was imposed in 2009 to help improve cash shortages resulted in a contraction of the banking sector. Before dollarization took effect in 2009 Zimbabwe had 28 banks compared to the current 19 licensed banks. The liquidity of banks is still under threat from the large fiscal deficit and government’s efforts to settle lending from banks by Treasury Bills that are being traded at discounts of around 40%.

Strengths

• Agency banking is breaking down barriers to financial inclusion such as cost and accessibility.
• Banks’ income in 2017 was boosted by the imposed cash withdrawal limits that led to multiple withdrawals by depositors.
• Banks’ performance indicators are showing improvement owing to qualifying non-performing loans (NPLs) that are being transferred to the Zimbabwe Asset Management Corporation.
• The Banking Act that came into effect in May 2016 provides for more stringent bank supervision, monitoring and control while diluting controlling individual or bank holding shareholder influence on banks.
• The deposit protection scheme enhances consumer protection in the event of bank insolvency.
• The improvement in financial inclusion through plastic and mobile money usage has contributed to consumer spending, boosting banks’ deposit taking.

Weaknesses

• Cash shortages are prohibiting growth in loyalty programmes with limits imposed on pay outs for cashback.
• Foreign currency shortages have affected the banking sector and branches of international banks and companies are struggling to transfer dividends to their overseas owners.
• Investment by commercial banks in technology is increasing operating costs which eats into margins and leads to retrenchments.
• No Islamic banking services are offered.
• Regional disparities are high, as relatively little geographic dispersion has taken place and the largely unbanked rural population has limited access to financial services.
• The banking sector is concentrated, with five players dominating the market.
• Weak governance of commercial banks.

Opportunities

• Further increases in mobile banking will facilitate growth in financial inclusion.
• The opening up of mortgages to commercial banks is expected to boost income.

Threats

• Continuing increases in operating costs will depress margins which could lead to underperformance.
• Government is imposing lending on banks through measures that might result in government loans not being recovered.
• Increasing trade in cryptocurrencies will take customers away from banks.
• Rising consumer prices and inflation impact on customers’ ability to invest, putting strain on the capital adequacy ratios of commercial banks.
• The cash shortage in the country poses a major threat to the operability of banks.
• The lack of a cybercrime policy threatens the safety of bank customers’ deposits.
• The liquidity of banks remains under threat from the large fiscal deficit.

Outlook

Recent wage increases, increasing vulnerabilities in the banking sector, weaknesses in the country’s business climate and the poor financial position of several state-owned enterprises all threaten Zimbabwe’s economic recovery. Banks regard the capping of interest rates and fees applicable on banking channels as presenting a real strain on their revenue-generating capacity. David Whatman, Ecobank Zimbabwe chairman, contends, “The continued downward pressure on interest rates and bank charges, coupled with the reduction of consumer disposable incomes and the resultant reduced savings, will continue to present challenges to the entire banking sector.” Growth in the sector overall is expected to be constrained for as long as cash shortages persist.

The Banking Industry in Zimbabwe
The Banking Industry in Zimbabwe 2018

Full Report

R 1 900.00(ZAR) estimated $103.00 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.10 (USD)*

Historical Reports

The Banking Industry in Zimbabwe 2020-02-26

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. COUNTRY INFORMATION 1
2.1. Geographic Position 3
3. DESCRIPTION OF THE INDUSTRY 4
3.1. Industry Value Chain 9
4. SIZE OF THE INDUSTRY 10
5. STATE OF THE INDUSTRY 17
5.1. Local 17
5.1.1. Corporate Actions 25
5.1.2. Regulations 26
5.1.3. Enterprise Development and Social Economic Development 30
5.2. Continental 32
5.3. International 35
6. INFLUENCING FACTORS 36
6.1. Economic Environment 36
6.2. Treasury Bills 37
6.3. Digital Banking 38
6.4. Financial Inclusion 38
6.5. Rising Operating Costs 39
6.6. Information Technology and Innovation 40
6.7. Cryptocurrencies 40
6.8. Labour 41
6.9. Cybercrime 42
6.10. Environmental Concerns 42
7. COMPETITION 43
7.1. Barriers to Entry 43
8. SWOT ANALYSIS 44
9. OUTLOOK 45
10. INDUSTRY ASSOCIATIONS 46
11. REFERENCES 46
11.1. Publications 46
11.2. Websites 48
COMPANY PROFILES 49
AFRICAN CENTURY LTD 49
AGRICULTURAL BANK OF ZIMBABWE LTD (THE) 51
BANCABC ZIMBABWE LTD 54
BARCLAYS BANK OF ZIMBABWE LTD 57
CBZ HOLDINGS LTD 61
CENTRAL AFRICA BUILDING SOCIETY 65
ECOBANK ZIMBABWE LTD 68
FBC HOLDINGS LTD 70
INFRASTRUCTURE DEVELOPMENT BANK OF ZIMBABWE 74
LION MICROFINANCE LTD 77
METBANK LTD 79
MICROPLAN FINANCIAL SERVICES (PVT) LTD 82
NATIONAL BUILDING SOCIETY 85
NEDBANK ZIMBABWE LTD 88
NMBZ HOLDINGS LTD 92
PEOPLE'S OWN SAVINGS BANK (THE) 96
RESERVE BANK OF ZIMBABWE 100
SMALL AND MEDIUM ENTERPRISES DEVELOPMENT CORPORATION (THE) 103
STANBIC BANK ZIMBABWE LTD 105
STANDARD CHARTERED BANK ZIMBABWE LTD 109
STEWARD BANK LTD 113
SUCCESS MICROFINANCE BANK LTD 115
ZB FINANCIAL HOLDINGS LTD 117