Adapt to economic woes, FCB boss tells bankers
FIRST Capital Bank Zimbabwe CEO Tapera Mushoriwa says banks must either “adopt or adapt” to the economic woes plaguing the economy, amid banks losing US$7,6 billion over several years.
Over the last two quarters, the Zimdollar has depreciated by triple digits against the greenback as the money supply grew during that period under review.
Speaking at last week’s 2023 Banks and Banking Survey launch hosted by our sister paper, The Zimbabwe Independent, and sponsored by First Capital Bank Zimbabwe, Mushoriwa said banks have to adopt and adapt to stay afloat.
“Across the globe, the macro-economic conditions continue to change faster than before and its imperative that organisations adopt or adapt to stay afloat, Zimbabwe is no exception. We have been faced with a myriad of issue and showed that we have the test of resolve and more so, specifically, the banking sector,” he said.
“You might all agree that the last two quarters have been challenging, but we continue to soldier on. Therefore, it begs the question to say what we should do to make sure we are driving a sustainable business especially with the intermediary role that we play in the banking sector to support organisations which will ultimately stimulate economic growth.”
Mushoriwa encouraged banks to adopt sustainable reporting and be part of the global move towards such practices to secure fresh lines of credit.
“We have seen an increased dollarisation in the market with the key being higher US$ flows from increased activities in the mining and agricultural sector. We have also seen a strong rebound in US$ flows in other sectors,” Mushoriwa said.
The survey revealed that the sector’s total assets had declined to US$4,75 billion from US$12,35 billion in 2018.
Thus, the sector has lost about US$7,6 billion over that period.
This was as a direct result of the local currency depreciating against the greenback as it continues to lack adequate support structures.
The local currency is set to depreciate further as Treasury is set to aise its expenditures in the 2024 National Budget to cover for the loss of value of the local unit.
“Overall, banks need to put in place appropriate incentives to attract deposits and ensure that bank charges are not a barrier or hindrance to the use of the banking sector by the public,” Reserve Bank of Zimbabwe governor John Mangudya said, also speaking at the 2023 Banks and Banking Survey launch.
“Some of the incentives that banks could consider include, monthly fee waivers for customers with a bank-specific minimum deposit balance (no frills account). This eases the current experience where depositors’ funds are continually eroded by monthly maintenance fees even when no transactions are conducted.”-newsday
