Banks shed 847 jobs in 2014

By Africa Moyo

The banking sector shed 847 jobs last year as financial institutions continue to streamline their operations to boost viability, statistics from the Zimbabwe Banks and Allied Workers Union (Zibawu) have shown.

It is forecasted that more than 1000 workers in the industry will also lose their jobs this year. The Infrastructure Development Bank of Zimbabwe (IDBZ) is currently in the process of offloading 25 employees in a process that has drawn the ire of the bank workers’ representative body.

Of the 847 employees that lost their jobs last year, most of them left voluntarily. ZB Bank lost the most workers at 482, followed by Steward Bank 125 employees, AfrAsia Zimbabwe 89, Standard Chartered Bank 80 and Metbank Zimbabwe 71.

On the other hand, 1 220 banking sector employees lost their jobs following the closure of eight banks. Allied Bank and AfrAsia surrendered their banking licences in January 2015 and February 2015, throwing 250 and 379 employees respectively onto the streets.

The closure of Royal Bank, Trust Bank, Interfin Merchant Bank, Genesis Bank, Capital Bank and Tetrad Investment Bank claimed the scalp of 109, 180, 82, 48, 66 and 108 workers in that order.

While 14 banks out of 19 that were operating as at December 31 2014 recorded profits, only five reported losses.

Most of the struggling banks are reeling under the weight of non-performing loans, which stood at 16 percent in December 2014 against international averages of 5 percent.

The banking sector’s core capital increased from US$790,4 million as at December 2013 to US$811,2 million in December 2014 on the back of improved profitability, but some banks have very low core capital levels and are reportedly instituting measures to ensure compliance with RBZ thresholds.

Thirteen out of 19 operating banking institutions were in compliance with the prescribed minimum core capital requirements as at December 31 2014.

ZB Bank had a core capital of US$9,56 million in December last year while Agribank had US$12,37 million and POSB had US$12,85 million.

The concern for many is largely on how ZB Bank steers its ship to safety given that its core capital is just over US$3 million more than what AfrAsia had before surrendering its operating licence.

RBZ boss Dr John Mangudya has said monetary authorities will continue to “closely monitor progress” in the implementation of the banks’ various plans.

The RBZ’s objective is to ensure the financial sector is free from distressed banks by June 30 this year, a development that could mean the closure of more banks, especially if the distressed institutions fail to find viable partners. Currently, Tetrad and Metbank are on the central bank’s watchlist. The Sunday Mail