Yes times are hard for most businesses in the Zimbabwean economy, but the Banking sector has a different story to tell. Steward Bank, in its financial review boasts of a 123% profit growth during the 6 months ended August 31 2018, while NBS witnessed a 23% growth in deposits for half year ended 30 June 2018 and CBZ closed the year ending 30 June 2018 with a US$34.4million profit after tax. The list can go on and on but what stands out from this is the fact that the banking sector is making it big at a time when the economy seems to be on a downward spiral. Could this be a case of unfair profiteering or it’s a matter of businesses strategically positioned for profits despite the economic environment? Let’s have a quick look at factors which could have accounted for the successes realized by some of the banks in our economy.

Talk of Steward Bank, a subsidiary of Econet Wireless Zimbabwe, conversations quickly shift towards how companies have to be innovative in these constantly changing times. No doubt Steward bank has been set to rip big in an economy shifting towards plastic money. The bank went on a massive recruitment of brand ambassadors who brought thousands of new clients to Steward Bank. The bank`s CEO talks of how they managed to make profits from an increased customer base on its digital money platforms. One can even recall the Kwenga innovation brought by the bank at a time when transactions had gone digital in the midst of the liquidity crisis.

Steward Bank Half Year Results

National building society managed to attract a good customer base by targeting specific sections of the market. The establishment at the Social Security Center was partly established to service pensioners and they managed to standout as being one of the few banks dishing out US$100 bills and bond notes. Obviously this set them apart at a time when other banks were limiting their withdrawals to $50.

We can even begin talking of the CBZ touch application introduced by CBZ which managed to make it easy for customers to transact using their mobile phones. With bank accounts linked to the Ecocash platform and the fact that people could do cross platform transactions, it explains why the banking system stood to make huge profits.

On the other hand, it’s also true that banks are recording huge profits because of bank charges and transaction fees. There is little cash in the economy, and we are being forced to use electronic transfers. The monthly electronic transfers done in Zimbabwe now exceed US$10 billion. Banks charge us transaction fees for every transfer done, and this explains some of the huge profits they are getting. Also to note is that all banks in Zimbabwe recorded impressive profits in 2017, indicating that it maybe less about innovation, and more of the whole banking industry benefiting from transaction fees as Zimbabwe is now a cashless country.

Banks also benefited from the mopping out of non-performing loans done by the Zimbabwe Asset Management Corporation (ZAMCO). ZAMCO was established by the Reserve Bank of Zimbabwe in July 2014 as part of holistic measures to deal with problem of rising non-performing loans (NPLs) in the banking sector. This was in recognition of fact that high NPLs invariably constrain banking institutions’ credit intermediation capacity thus, acting as a drag to the banks financial performance and economic growth. To date, ZAMCO has bought about $1 billion NPLs from banks.


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