THE Deposit Protection Corporation (DPC) has more than doubled its compensation fund to about US$33 million, while clearing all outstanding claims linked to bank failures between 2009 and 2013, businessdigest has established.
The fund has grown sharply from US$15,2 million in the prior year and US$7,8 million in 2023, underlining a sustained build-up of reserves.
DPC, a statutory body mandated to safeguard depositors in the event of bank failures, runs a deposit insurance scheme financed through contributions from licensed banks and deposit-taking microfinance institutions.
Premium income has strengthened, with total US dollar assessed premiums rising nearly 74% to US$6,6 million in 2024, driven by increased contributions, while the ZiG component reached ZiG25,7 million.
“We have witnessed our fund growing exponentially compared to where we were two to three years back, when it was below US$10 million. As of now, we are upwards of US$33 million,” DPC chief executive officer Hopewell Zinyau told businessdigest.
The expansion comes as the corporation positions itself as a key pillar in rebuilding trust in Zimbabwe’s formal banking system after years of instability marked by bank failures and currency volatility.
With an estimated US$2,5 billion circulating in the informal sector, the DPC is also seeking to draw unbanked funds into formal channels by reinforcing depositor confidence.
Zimbabwe’s banking sector came under severe strain, with several indigenous institutions collapsing between 2009 and 2013 due to weak capitalisation and governance failures. Thousands of depositors lost access to their savings, deepening mistrust.
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“We have managed to clear all outstanding deposit compensation for all banks that were insolvent around 2009 up to 2013,” Zinyau said.
The DPC has compensated depositors from institutions, including Allied Bank, Genesis Investment Bank, Interfin Banking Corporation, Royal Bank, Trust Bank and AfrAsia Bank.
In total, the corporation has paid out US$4,04 million to 23 242 affected depositors.
Zinyau said policy changes in 2019 temporarily distorted the corporation’s financial metrics after Statutory Instrument 142 of 2019 reintroduced the Zimbabwe dollar as the sole legal tender until March 2020, triggering exchange rate volatility.
“Remember the one-to-one conversion which came through in terms of the Statutory Instrument in 2019. That distorted the numbers from our viewpoint,” Zinyau said.
Despite these headwinds, the DPC has strengthened its balance sheet and diversified its investments.
“We have strengthened our investment portfolio by getting into safe and secure asset classes such as Real Estate Investment Trusts, where we are generating satisfactory returns,” Zinyau said. “We encourage depositors to use the formal banking system because of the relative financial stability we are now witnessing in the economy. Inflation has moderated and volatility has significantly declined, making it safer for depositors to place their funds in banks.”
