BY MISHMA CHAKANYUKA
Central African Building Society (CABS), a subsidiary of Old Mutual Zimbabwe, is shutting down four of its branches in the next two months as the financial institution streamlines business in line with the deteriorating economic environment.
The branches that will be closed include Mt Pleasant in Harare, Nkulumane in Bulawayo, Dangamvura (Mutare) and CA House, again in Mutare.
In a circular gleaned by NewsDay and signed by the bank’s managing director Simon Hammond, Mt Pleasant, Nkulumane and Dangamvura branches will close down on October 31, while CA House in Mutare will follow suit on December 31, this year.
According to the circular, banking services will now be available at Arundel in Harare, Jason Moyo in Bulawayo and Herbert Chitepo in Mutare.
“The notice is authentic. Those are small branches that are too close to each other, for example, Arundel and Mt Pleasant. Operational costs were not supportive of business. Employees will be absorbed somewhere,” a source at CABS, who asked for anonymity, told NewsDay.
Efforts to get a comment from Hammond were fruitless as he did not respond to enquiries sent to him on Monday.
In terms of its financial performance, CABS recorded a total comprehensive income of US$50,1 million in 2018 from a comparative 2017 figure of US$42,43 million.
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The bank’s profit for the period under review increased to US$108,57 million from the US$91,31 million recorded in 2017.
The bank’s total assets increased from US$1,3 million in 2017 to US$1,5 million in 2018, while the bank’s capital and liquidity remained strong. This was against a total liabilities increase of US$1,3 million in 2018.
Total equity was US$194 million, up from US$189 million after the initial IFRS 9 adjustment of US$20 million as well as dividends of US$25 million.
Tier 1 capital was US$131 million and it remained above the Reserve Bank of Zimbabwe (RBZ) requirement for a minimum of US$20 million Tier 1 capital for Building Societies. It was also above the RBZ requirement for a minimum of US$100 million Tier 1 capital for Tier 1 banks by 2020.
The liquidity ratio stood at 41% in 2018, an increase from the comparative 2017 of 38%.
