As usual, at this time of the year, Financial Sector Spotlight reviews the notable events of the past year as it walks into the sunset.
Opinion by Omen Muza
Accordingly, this installment chronicles highlights of the first six months of 2012, which turned out to be a very eventful year dominated by issues of liquidity, concerns about bank stability, recapitalisation and of course the closure of three banks.
January 2012: The month of January started in earnest with CABS entering into a $15 million deal with the City of Harare for the construction of 3 000 housing units in Budirio to benefit homeseekers on the city’s waiting list.
Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono gave assurances that the financial sector was safe and sound despite facing numerous financial and economic challenges.
Troubled banks, he said, were not systemically important in terms of market share, share of assets and loans.
Meanwhile Kingdom Bank reached an agreement with AfrAsia Bank for the latter to invest $9,5 million for a 35% equity stake.
Presenting his 2012 Monetary Policy Statement on the January 31, RBZ governor Gono gave undercapitalised banks an ultimatum to comply by the February 14 2012 or exit the banking sector.
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February 2012: The month began with the RBZ extending the period of curatorship for ReNaissance Merchant Bank (RMB) from February 2 to March 2 2012.
Advisor to the RBZ governor Munyaradzi Kereke left the central bank with effect from February 1 after an eight-year stint. The National Social Security Authority (NSSA) snapped up an 84% stake in RMB in a $24 million deal which whittled down the shareholding of founding shareholders to a mere 16%.
Treasury ordered all banks to repatriate 75% of funds held in offshore accounts with effect from March 1 as part of measures to curb the country’s liquidity challenges while the RBZ increased the prudential liquidity ratio from 25% to 27.5% by March 2012 and 30% by end of May 2012.
March 2012: On March 2 RBZ uplifted the curatorship of RMB following successful reorganisation of the bank and investment by NSSA. David Tapuwa Hatendi, former chief executive officer at MBCA Bank and NMB Bank, passed away on the March 12.
Finance minister Tendai Biti announced the appointment of Kupukile Mlambo and reappointment of Charity Dhliwayo as deputy governors of the RBZ.
He also revealed a new monetary policy committee initially consisting of Henry Dzinotizeyi, Rudo Faranisi, Anthony Hawkins, Kenias Mafukidze and Brains Muchemwa, although Mafukidze and Faranisi were eventually dropped.
CBZ Holdings group chief executive officer Nyasha Makuvise retired after 16 years of service, apparently as part of a scheduled succession planning transition which saw John Mangudya succeeding him.
April 2012: ZIMRE Holdings confirmed having sold its entire shareholding in undercapitalised banking subsidiary Genesis Investment Bank to an unidentified consortium of local and foreign investors and on April 19 an EGM of shareholders of ZABG shareholders approved the increase in ordinary share capital and approved new capital injection of Trebo and Khays (Pvt) Limited through a private placement.
At the annual general meeting of the Bankers Association of Zimbabwe, George T Guvamatanga of Barclays Bank, was chosen as the president of the association and Somkhosi MT Malaba, chief executive officer of Agribank as the vice-president.
May 2012: On May 15, Ecobank Zimbabwe was authorised in terms of Section 16 of the Banking Act to commence the business of commercial banking.
A few days later Metropolitan Bank of Zimbabwe Limited notified the market that it had changed its name to Metbank Limited, adopting a new payoff line “stronger together!”
RBZ directed banks to stop offering banking services to Zimplats after the platinum producer defied an order to repatriate funds in its offshore account. Access was, however, reinstated a few days later after the company complied with the directive.
June 2012: On June 11 Genesis Investment Bank Limited voluntarily surrendered its banking licence in terms of Section 14 (4) of the Banking Act after failing to raise capital.
On the same day the RBZ placed Interfin Bank under the management of a curator for a period of six months following a determination that the bank was facing critical liquidity challenges. The government gazetted new regulations compelling foreign-owned banks to dispose 51% interest to blacks within a year.
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Omen N Muza writes in his personal capacity.
He is a banker and managing director of TFC Capital (Zimbabwe) (Pvt) Ltd, a Harare-based financial advisory, research and training company with interests in banking, technology and agriculture as well as the convergence area among them.
