Staff Reporter
THE share of deposits controlled by the country’s top four banks — CBZ Bank, Stanbic Bank, Standard Chartered Bank and Barclays Bank — has declined in percentage terms, latest industry statistics show.
Seventy five percent of deposits were sitting with the four big banks at the end of September last year. But the top four banks now control 60 percent of the deposits mobilised by the entire financial sector, a 15 percentage-point decline from the previous position in September last year.
According to the same statistics, the bottom placed 24 banks have gained 15 percentage-points to 40 percent in the review period.
A presentation by BancABC chief economist, James Wade, showed that bank deposits have been growing ever since the country migrated to the use of multi-currencies in February last year.As of May this year, total deposits were now estimated at US$1,8 million.
This means that out of the 28 deposit-taking institutions in Zimbabwe, the bottom placed 24 banks share only US$800 million.
Banking sector deposits stood at US$300 million in February last year before doubling to US$706 million in June the same year.
“This is a US$5 billion economy and we are sitting at US$1,8 billion in deposits,” Wade told a Confederation of Zimbabwe Industries meeting in Harare on Friday last week.
“We have made tremendous gains from US$300 million in February last year. But four big banks are sitting at 60 percent of the US$1,8 billion, which is about US$1 billion. This means 24 banks are sitting at 40 percent,” the BancABC chief economist said while presenting an analysis of the state of the banking industry.
Wade said despite the current setbacks he was confident Zimbabwe’s banking sector would turn the corner.
He said Zambia, which is a US$12 billion economy, had US$2 billion in bank deposits in May while Botswana, another US$12 billion economy was sitting at US$5 billion deposits.
“We can catch up with our regional counterparts,” Wade said.
Zimbabwe used to be the second biggest economy in southern Africa after South Africa but a 50 percent plunge in Gross Domestic Product during 10 years of sustained recession has left it only slightly bigger than Malawi, Swaziland and Lesotho.
The value and number of transactions going through banks has significantly decreased compared to the situation that prevailed in the late 1990s after a crippling domestic financial crisis hit banks between 2004 and 2008, leaving big players like Trust Bank, CFX Bank, Royal Bank, Barbican Bank and Time Bank bellies up.
Punitive lending rates as high as 30 percent, perceived high risks and low deposit rates of about two percent have discouraged savings.
Government warned last week it was growing impatient with banks and could be forced to take corrective measures through statutory instruments to compel them to offer viable interest rates on deposits if ongoing discussions with the Bankers Association of Zimbabwe (BAZ) fail.
BAZ president, John Mushayavanhu, said he is still worried that industry players are still operating far below installed capacity almost 12 months after the new economic reforms commenced.
