'Zimbabwe's banking sector sound'

Published: 16 January 2014

The Bankers Association of Zimbabwe continues to find the financial sector essentially sound and believes reports of some troubled banks are not a reflection of the status of the sector or of the economy. BAZ president Mr George Guvamatanga said his association would not defend financial institutions that were caught up in malpractices and abuse of depositors' money.

He was addressing Members of Parliament on Monday during a post-Budget seminar aimed at unpacking the 2014 National Budget presented by Finance Minister Patrick Chinamasa last month.

Southerton Member of the National Assembly Mr Gift Chimanikire (MDC-T) had asked Mr Guvamatanga to comment on reports that they were three banks that were reeling under financial constraints and what the implications were on depositors.

"Even in a stable environment if you do not manage your business, you will face closure. So the closure of banks is not really a complete reflection of the state of the banking sector today because banks close for many reasons. It can be insider loans, non-performing loans . . . If banks don't follow proper corporate governance, even as the president (of BAZ) we will not defend them," said Mr Guvamatanga, who is also Barclays Bank managing director.

Responding to another question regarding indigenisation of foreign banks consistent with the country's laws, Mr Guvamatanga said his association had no quarrels with that.

He said negotiations were already at an advanced stage but did not give further details.

"I don't think there are major concerns over that matter. Negotiations are on going and we believe the matter will be resolved in a manner that is in the best interest of all Zimbabweans," he said.

Mr Guvamatanga said Barclays Bank had operated in Zimbabwe for more than a century and it had never clashed with the Government of the day.

"Barclays Bank has been operating for 101 years under successive governments and has never had any issue with the Government," he said.

In terms of the indigenisation law, a foreign investor should sell 51 percent equity to locals of his choice and remain with at least 49 percent. The policy is being implemented in all sectors of the economy such as mining, industry, agriculture and banking.

- herald