The Sunday Mail
LOCAL banks, the bulk of which are adjusting their business models to meet the parameters of a dollarised environment, shed more than 460 jobs since the beginning of 2014, though the Reserve Bank of Zimbabwe maintains that the sector remains on solid footing.
The transition from the Zimbabwean dollar to the multi-currency regime has prompted banks to rationalise operations to contain costs.
Zimbabwe Bankers’ Union assistant secretary-general, Mr Shepherd Ngandu, told The Sunday Mail Business that the job losses were split between workers that were dismissed “unceremoniously” and those that opted for “voluntary retrenchment” .
“From January up to July this year, we have seen 461 banking sector employees losing jobs.
“The figure is broken down as follows: Steward Bank 127, ZB Bank 208, AfrAsia 83 and MetBank 43.
“ZB Bank chopped the employees unceremoniously, mostly those doing cleaning and security, while the AfrAsia retrenchments were voluntary.
“At Steward Bank, there was a negotiated retrenchment process; so, there were no challenges to the retrenchments . . .
“Banks such as MetBank and Allied Bank are failing to pay salaries because they are struggling, but we continue to have banks that are doing well but are not paying well.
“For instance, we demonstrated at Stanbic because the bank has no decency of negotiating with its employees over salaries.
“Some banks have adjusted employee salaries by five and 10 percent, but Stanbic has not despite posting a US$18 million last year,” said Mr Ngandu.
It is alleged that Stanbic Bank awarded top management an increment in March this year and ignored the rest of the workforce.
Market rumours indicated that the bank’s managing director, Mr Joshua Tapambgwa, was planning to engage employees over their grievances beginning August 27.
The bank had not responded to e-mailed questions by the time of going to print.
There are fears that more jobs will be lost in the sector as most financial institutions are struggling to contain costs.
But there are huge costs associated with retrenchments.
Many banks have been trying to pass on their costs through bloated service charges and costs.
In his maiden Monetary Policy Statement a fortnight ago, RBZ Governor Dr John Mangudya said: “Some banks are struggling to manage costs against the backdrop of declining margins hence the tendency to compensate incomes with higher interest charges and bank charges.”
As part of a broad rationalisation exercise, AfrAsia has closed five branches, understood to be Ruwa, Chitungwiza, Newlands (Harare), Belmont (Bulawayo) and Victoria Falls.
Other banks are following suit, rationalising both their branch networks and staff counts.
Despite the present discomfort, some banks remain profitable.
The 461 jobs lost in the banking sector constitute 18,4 percent of industry-wide job losses.
Statistics from the Zimbabwe Congress of Trade Union (ZCTU) sourced from the Retrenchment Board indicate that more than 2 500 jobs were shed in the first six months of the year.
Central bank figures show that the aggregate profit in the banking sector soared to US$13,8 million for the first half of the year compared to US$4,9 million in the same period a year earlier.
Twelve of the 19 local banks recorded profits, while bank deposits also climbed 4,9 percent to US$5 billion from US$4,7 billion at the beginning of 2014.
Non-performing loans, which have risen from 1,6 percent in 2009 to 18,5 percent (US$705 million) as at June 2014, continue to be a major setback.
Only four banks — Allied Bank, MetBank, AfrAsia and Tetrad — whose assets account for 7,2 percent of the sector, are presently struggling.
Monetary authorities, however, contend that AfrAsia shareholders have shown appetite to rescue the institution.
Policymakers are introducing measures to buttress the financial sector by adopting a three-tier model to meet recapitalisation framework of banks.
Under the new framework announced by the central bank last week, large commercial banks and all foreign banks are expected to increase their capital requirements from the current US$25 million to US$100 million by 2020.
These banks will be entitled to introduce additional services such as mortgages, leases and hire purchase apart from core activities.
Banks that do not have the capacity to raise such an amount will only be allowed to offer core banking services.
Such banks, falling under Tier II, are expected to maintain their capital at US$25 million.
Tier III, requiring a minimum capital of US$7,5 million from the present US$5 million, will only be allowed deposit-taking micro-finance activities.
