The document provides an overview and analysis of the competitive landscape of the Zimbabwean banking sector in 2013. It discusses the structure and performance of the banking sector, comparing it to other countries in the region. While the sector has remained sound, banks are facing challenges from the uncertain political environment and tight liquidity conditions. The ability to mobilize cheaper credit and diversify revenues will be important for banks going forward. The sector exhibits monopolistic and oligopolistic characteristics, with the potential for electronic banking to provide future opportunities.
Impact of Liquidity crisis to commercial banks in ZimbabweAleck Makandwa
A research carried out by a 2:2 student studying Banking and Finance at Great Zimbabwe Universty which can help Bankers and those who are interested in Banking System to know about the effects of Liquidity crisis to commercial banks in Zimbabwe.....
Bank Industry: Bank of China
Created in 1912 in Beijing by Sun Yat Sen
Internationalisation since 1929
China mainland, Hong-Kong, Macao, Taïwan and 37 countries
Impact of Liquidity crisis to commercial banks in ZimbabweAleck Makandwa
A research carried out by a 2:2 student studying Banking and Finance at Great Zimbabwe Universty which can help Bankers and those who are interested in Banking System to know about the effects of Liquidity crisis to commercial banks in Zimbabwe.....
Bank Industry: Bank of China
Created in 1912 in Beijing by Sun Yat Sen
Internationalisation since 1929
China mainland, Hong-Kong, Macao, Taïwan and 37 countries
Our October 2010 Newsletter is now available. The Newsletter Article, “Can The Fed Boost The Economy?” discusses the four things that Fed Chair Bernanke said that the Fed could do to boost the economy. The article explains how each of the 4 options he proposed would affect your company’s future. Our second article, “In Case You Didn’t Notice, The Recession Ended In June 2009?” addresses the real meaning of the recessionary slide ending before the stimulus had any impact and what it will take for the economy to have a strong recovery. Our final article, “Is The Real Employment Picture Still Deteriorating?” talks about the negative meaning of last Friday’s Labor Department unemployment report and its long term implications.
Public debt is intended to bridge the gap between domestic savings and investment. This paper examines the effect of public debt on economic growth in Bangladesh using autoregressive distributed lag bound testing approach to cointegration. It finds a negative relationship between public debt and economic growth both in the short-run and the long-run. That is, a significant rise in the public debt in Bangladesh appears to be a burden for the economic growth controlling for other determinants of growth. The findings suggest that funds obtained through public debt are not utilized in the productive economic avenues which may improve the growth scenario in Bangladesh. Also, the adverse effect exerted by public debt may further be responsible for a reduction in investment and slower growth of capital stock, which eventually can hamper the labour productivity growth in the country in long run.
Our October 2010 Newsletter is now available. The Newsletter Article, “Can The Fed Boost The Economy?” discusses the four things that Fed Chair Bernanke said that the Fed could do to boost the economy. The article explains how each of the 4 options he proposed would affect your company’s future. Our second article, “In Case You Didn’t Notice, The Recession Ended In June 2009?” addresses the real meaning of the recessionary slide ending before the stimulus had any impact and what it will take for the economy to have a strong recovery. Our final article, “Is The Real Employment Picture Still Deteriorating?” talks about the negative meaning of last Friday’s Labor Department unemployment report and its long term implications.
Public debt is intended to bridge the gap between domestic savings and investment. This paper examines the effect of public debt on economic growth in Bangladesh using autoregressive distributed lag bound testing approach to cointegration. It finds a negative relationship between public debt and economic growth both in the short-run and the long-run. That is, a significant rise in the public debt in Bangladesh appears to be a burden for the economic growth controlling for other determinants of growth. The findings suggest that funds obtained through public debt are not utilized in the productive economic avenues which may improve the growth scenario in Bangladesh. Also, the adverse effect exerted by public debt may further be responsible for a reduction in investment and slower growth of capital stock, which eventually can hamper the labour productivity growth in the country in long run.
The Consequences of Implementing the Indigenisation and Economic Empowerment ...iosrjce
The paper discusses the consequences of implementing the indigenisation laws in their current form
on the banking sector in Zimbabwe. The law requires that firms operating in the country which are owned by
non-indigenous Zimbabweans and with asset values exceeding US$500 000 cede 51% shareholding to
indigenous black Zimbabweans. The paper concludes that the benefits of indigenising foreign banks are far
outweighed by possible negative consequences. These consequences include loss of confidence in the banking
system, loss of lines of credit, loss of access to latest technologies, and as well as limited exposure to
international best practices. The programme may lead to foreign banks disinvesting from the country with
serious repercussions to the economy. The indigenisation of foreign banks should therefore be approached with
caution so that the indigenised banks would at least retain their international appeal with the foreign partners
retaining influence on important decisions affecting the operations of the banks.
Etude PwC sur les opérations de fusions et acquisitions dans le secteur banca...PwC France
http://pwc.to/ZVxv2H
L’étude « Brave new world : new frontiers in banking M&A » menée par PwC montre que le recul des fusions-acquisitions bancaires observé ces dernières années ne s'explique pas uniquement par un ralentissement conjoncturel, mais traduit un changement radical des comportements en raison notamment de la modification de l’environnement économique et réglementaire.
Comment les opérations de fusions et acquisitions dans le secteur bancaire évoluent-elles ? Quelles perspectives pour les années à venir, région par région ? Quelles questions les banques doivent-elles se poser ?
The thrust of this study was to determine the impact of micro credit on the MSMEs sector in CRS,
Nigeria. Three hypotheses were formulated from the research questions and tested by using chi-square statistic
to validate the truth or otherwise of the hypotheses. Ex-post factor research design was adopted and a sample
size of 158 respondents was selected and used for the study. A structured questionnaire was used in obtaining
the data. In testing the hypotheses, all the calculated chi-square values were greater than the critical chi-square
value at the given level of significance and degree of freedom. This resulted in rejecting the null hypotheses
while the alternate hypotheses were retained. The results indicated that micro credit programmes have
significant effect on MSMEs in CRS. Equally, credit administration has a significant effect on the performance
of microcredit programmes and that collateral requirements on MSMEs have significant effect on obtaining
credit from microfinance institutions in CRS. Arising from the findings, the study recommends that government
should make more microcredit programmes available for the development of MSMEs in CRS. There should be
efficiency in credit administration on the part of both government and the private sector so as to enhance the
performance of microcredit programmes in CRS and also collateral requirements should be minimized, while
low interest rate should be charged on micro, small and medium enterprises so as to enhance obtaining of credit
facilities from microfinance institutions in the State.
This revision presentation covers aspects of Extract 5 for the OCR F585 Global Economy paper - the main focus is on the structural (supply-side) issues facing the Zambian economy. The presentation offers contextual background and an overview of the supply-side policies that might be effective in sustaining the growth of the Zambian economy and lifting their human development outcomes.
Croissance et innovation dans la banque de détail en AfriqueOthmane Ghailane
Le cabinet McKinsey Global Banking a tout juste publié un nouveau rapport sur la banque de détail en Afrique sous le thème : Rugir à la vie, croissance et innovation dans la banque de détail en Afrique. Plus d'infos : http://bit.ly/2tgrUzw
Micro Financing Of Small and Medium Enterprises (Smes) In Zambiainventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Media statement Reaction to ratings action by Moody's (2)SABC News
Moody's Investors Service, ("Moody's") has today downgraded the Government of South Africa's long-term foreign-currency and local-currency issuer ratings to Ba1 from Baa3. The outlook remains negative.
American Research Journal of Humanities & Social Science (ARJHSS) is a double blind peer reviewed, open access journal published by (ARJHSS).
The main objective of ARJHSS is to provide an intellectual platform for the international scholars. ARJHSS aims to promote interdisciplinary studies in Humanities & Social Science and become the leading journal in Humanities & Social Science in the world.
Financial literacy is a major determinant of demand for financial services. This study sought to
determine the levels of financial literacy of informal Enterprise owners and to establish the link with Enterprise
usage of financial services, and at the same time to determine socio-demographic and Enterprise characteristics
that may affect levels of financial literacy, and Enterprises’ usage of financial services
Similar to Zimbabwe banking sector analysis 2013 (20)
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
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how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
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how can i use my minded pi coins I need some funds.DOT TECH
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USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
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how to sell pi coins on Bitmart crypto exchangeDOT TECH
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@Pi_vendor_247
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What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
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How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
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1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
2. Zimbabwe Banking Sector’s Competitive Landscape 2013
October 17, 2013
EXECUTIVE SUMMARY
The release of the Banking Sector Report is at a time when some banks
port
have not yet published their half year financial results, notably Afrasia
Kingdom, Trust and Stewart Bank. Despite, the architecture of the
Zimbabwean Banking sector spanning from
Commercial Banking
business, Building Societies and, as well POSBs, the report focus is mainly
on Commercial Banks, for clear comparison. While the banking sector has
remained sound taking a cue from improving macroeconomic
fundaments, over the retrospective period an essential shift has
happened with most banks offering little surprises in their financials.
Current half year profitability profiles are indicative of the hurdles that
lf
have exhibited the general economic and political landscape.
Zimbabwean banking sector is in part affected by the uncertainty around
the political scenery as most depositors are risk averse to similar and
related losses of political dispensation in historical events, while also the
effects of Memorandum of Understanding (
(MoU) cannot be taken for
granted. Revenues in the sector were confronted by the MoU agreement
established earlier on in the year, which overall affected the performance
of non funded income. The effects of the MoU have echoed the need for
alternative revenue sources within the sector with strong emphasis on
sustainable investment in Information Technology Systems and Product
innovation and Development. The aptitude to mobilize cheaper lines of
credit will also have profound domino effect in the sector going forth as
the local liquidity conditions have remained resiliently squeezed.
Consequently, the sector has exhibited sta
stagnating growth in the deposit
base against a more than proportionate increase in funding requirements,
a challenge that has continued to debilitate the sector from sufficiently
matching the economy’s funding requirements
Like any phenomenon, economic theory is not immune to the mean
ry
reversion principle, that, over time extreme ends of a spectrum will be
eliminated as variables tend towards the mean, weakest players are
eliminated while abnormal profiteers are forced to settle for normal
profits as the competitive landscape intensifies. Such is the case for
etitive
Zimbabwe’s banking sector, confronted by revenue restricting legislation,
and cut throat competition in a monopolistic competition setup with
setup,
many players scrambling for a little around US$4.4 billion wo
worth of
deposits.
Meanwhile, capitalization efforts will continue to be at the forefront of
corporate finance and restructuring activity in the sector as Bankers strive
to meet capitalization requirements. The ability to secure partnerships
with regional and international investors will depend largely on individual
nd
performance and potential as well as the prevailing political and economic
environment, clarity and delineation on the Indigenization policy with
regards new investment will also play a profound role in facilitating
foreign investment into the sector.
An in depth analysis for the Zimbabwean Banking Sector 2013
3. Zimbabwe Banking Sector’s Competitive Landscape 2013
October 17, 2013
Zimbabwe Banking Sector Snapshot
Sector exhibit a blend of monopolistic and
oligopolistic structure........
.....World Economic Forum Ranking too
pessimistic and penalising and disregard
of the combined efforts of business
stakeholders - (Risk management and
capitalisation efforts......
The Zimbabwean banking system is well developed and effectively
regulated, comprising the Central Bank of Zimbabwe, 16 Commercial
Banks, 2 Merchant Banks, 4 Building Societies and 1 Savings Bank.
,
However, as alluded to earlier on, the report co
covers only Commercial
Banks. The country’s banking system exhibit a blend of a monopolistic
and oligopolistic structure wherein the products offeri
offering are
differentiated but however similar in nature. With the convergence of
technological advancement in the global perspective, electronic banking
facilities have become extensive; a platform that in our view in the
short-run offers an opportunity for future economic benefits, no only in
ture
not
the sector but on a national outlook.
In the context of Indigenisation and empowerment; to date most banks
have complied except for only 3, notably Barclays, Standard chartered
and Stanbic Bank. While the government has maintained thumbs up on
the law, target being also the banking sector, in our view, to preserve
the credibility and sanity of the banking sector, while also backing up
the trickling in of lines of credit from the international arena, a less
aggressive approach is essential on foreign owned banks.
Despite the perceived threats of indigenisation and economic
empowerment, the Zimbabwean banking sector has remained sound
and viable. The soundness of banks was ranked 137 out of 148 in the
World Economic Forum Global Competitive Index 2013 -2014; but
however, we hold this ranking as too pessimistic, penalising and
disregard of the combined efforts of business stakeholders (Risk
management and capitalisation efforts) to ensure soundness in the
sector. The table 1 below summaries the Zimbabwean banking system
development.
Table 1: Summary of the Zimbabwean banking System development
GDP per Capita (GDP*) US$
756
No. of Banks
22
GDP* to Banks (The greater the Number the Less Banked the
Population, relative to other comparable)
Bank Loans /GDP (%)
34.4
Deposits/GDP (%)
40.84
Deposits Accounts per 1000 Individuals
138.55
Bank Branches/100 000 Individuals
7.11
WEF Soundness of Banks (Score 1-7) (Score 1-7, Most
7,
Preferable = 7)
Source: World Economic Forum and IMF
An in depth analysis for the Zimbabwean Banking Sector 2013
32.58
3.4
4. Zimbabwe Banking Sector’s Competitive Landscape 2013
October 17, 2013
Is Zimbabwe Over/Under
Over/Under-banked?
While there is prudential supervision of banks in Zimbabwe to ensure
safety and soundness of the banking system to contribute to the
stability of the financial sector; there has been a debate on whether
the economy is over or under-banked. To try and bring an end to this
banked.
dilemma, comparable key variables have been assessed notably, Per
assessed,
Capita GDP to Banks, Total Deposits to GDP, Total loans and advances
,
to GDP, Deposits Accounts per 1,000 individuals, as well as Financial
Inclusion for a selected countries in the Sub-Saharan Africa region.
Saharan
Relative Country Overview
South Africa
....the economy’s growth outlook is
expected at 3.2% in 2013, pointing to
structural problems in the economy.....
South Africa is one of the richest countries in SSA and was ranked 53
chest
out of 148 countries in the World Economic For
Forum Global Competitive
Index 2013 -2014. The country has an estimated population of 51.2
.
million (2012) translating to a per capita GDP of $7,191. Currently, the
country is faced with a triple challenge of chronic high unemployment,
poverty and inequality amid a slow and volatile domestic and global
economic environment. To this effect, tepid growth is inevitable with
2.0% growth expected in 2013 while the economy’s grow outlook is
growth
expected at 2.8% in 2014, pointing to structural problems in the
economy (export demand from Europe and domestic consumption
remain subdued and labour unrest continues to harm mining output).
GDP (PPP) Per Capita (Int'l $), 1990 to 2012
2500
10000
2000
8000
1500
6000
1000
4000
500
2000
South
Africa
12000
SubSaharan Africa GDP*
3000
0
0
South Africa
SSA GDP* (ppp) US$
Source: World Bank, IMF
Meanwhile, in the context of the Banking sector the country’s banking
sector,
sector development has remained impressive at third position out of
148. The Financial services sector is South Africa’s biggest, account
accounting
for 21.1% of total GDP. The banking sector compares favourably with
ompares
those of the industrialized countries, with a total of 77 Banks. The
access and the use of financial services through ATMs per 100,000
adults is at approximately at 59.9 with ATMs per 1000 square km at
17.50. Figure 1 below explains the development of South Africa’s
banking system.
An in depth analysis for the Zimbabwean Banking Sector 2013
5. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Fig 1: South Africa’s banking sector development
GDP per Capita (GDP*) US$
7,191
No of Banks
77
GDP* to Banks (The greater the Number the Less Banked the
Population, relative to other comparables)
93.39
Bank Loans /GDP (%)
73.38
Deposits/GDP (%)
43.92
Deposit Accounts per 1000 Individuals
1,373.44
Bank Branches/100 000 Individuals
10.42
WEF Soundness of Banks (Score 1-7) (Score 1-7, Most Preferable = 7)
7,
6.6
Source: World Economic Forum and IMF
Botswana
........The economy is characterised as one
of Africa’s success stories..........
Botswana is categorised as an “Upper middle income” country by the IMF,
rised
middlewith an estimated population of 2.0 million( 2012). While per Capita GDP
stood at $9,398 – the highest in SSA; with high income inequality
;
distribution, ~20.7% of total population is classified as extremely poor.
However, premised on sound macroeconomic policies, good governance,
remised
well-functioning institutions and judicious management of diamond
functioning
resources, Botswana’s economy is characterised as one o Africa’s success
of
stories, and was ranked 74 out of 148 countries in the Wor Economic
World
Forum Global Competitive Index 2013 -2014 Meanwhile, the economy’s
2014.
Real GDP has averaged 3.62% in the period between 2009 and 2012.
However, with the contagion effects of the global economic slowdown, the
short-term outlook points to a retard, with GDP growth expected to
,
decelerate to 5.6% and 5.5% in 2013 and 2014 respectively.
3000
16000
14000
12000
10000
8000
6000
4000
2000
0
2500
2000
Botsw
ana
SubSaharan Africa GDP*
GDP (PPP) Per Capita (Int'l $), 1990 to 2012
1500
1000
500
0
Botswana
SSA GDP* (ppp) US$
Source: World Bank, IMF
An in depth analysis for the Zimbabwean Banking Sector 2013
6. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
......Banking Sector exhibit an oligopolistic
market structure......
In perspective to the Banking System , Botswana’s banking sector exhibit an
exhibits
oligopolistic structure, comprising of ten commercial Banks. Half of these
banks are listed on the BSE and they command approximately 77% of the
total loan book and 78.2% of total deposits. AMTs per 100 000 adults in the
economy stood at 27 while bank branches per 100 000 adults is at 9. Bank
branches per 1000 square km is around 0.21. Fig 2, below give a snapshot of
Botswana’s banking sector development.
Fig 2: Botswana’s banking sector development
GDP per Capita (GDP*) US$
9,398
No. Of Banks
10
GDP* to Banks (The greater the Number the Less Banked the
Population, relative to other comparable)
939.8
Bank Loans /GDP (%)
29.16
Deposits/GDP (%)
30.53
Deposit Accounts Per 1000 Individuals
728.56
Bank Branches/100 000 Individuals
8.56
WEF Soundness of Banks (Score 1-7) (Score 1-7, Most Preferable = 7)
7,
5.9
Source: World Economic Forum and IMF
Zambia
..... real GDP is forecasted to remain solid
in the ensuing years amidst the ability to
attract the attention of varying business
people and organisations from the rest of
the world due to the favourable political
and socio-economic environment..........
Zambia is part of the Southern African Development Community with an
estimated population of 14.08 million in 2012. Its GDP grew at an average of
ts
6.3% in the period between 2004 and 2012. The economy’s real GDP is
forecasted to remain solid in the ensuing years (average of 7.7% in 20132017), due to its ability to attract the attention of varying business people
and organisations from the rest of the world aback the favourable political
and socio-economic environment. While the economy is the largest producer
economic
of copper in the African continent, continued production is set to benefit the
inent,
economy from firming of copper prices in the international market.
ices
The economy was ranked 93 out of 148 countries in the World Economic
Forum Global Competitive Index 2013 -2014, moving nine places in the
2014,
positive from 102 in the prior year index. The g
graph below depicts the
Zambian per Capita GDP relative to SSA in the period 1990 and 2012.
An in depth analysis for the Zimbabwean Banking Sector 2013
7. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
GDP (PPP) Per Capita (Int'l $), 1990 to 2012
1600
1400
2500
1200
2000
1000
800
1500
Zambia
SubSaharan africa GDP*
3000
600
1000
400
500
200
0
0
.....Banks earn their revenue under
monopolistic competition conditions.....
Zambia
SSA GDP* (ppp) US$
Source: World Bank, IMF
In Zambia, there are 19 registered commercial ba
banks. Zambian banks earn
their revenue under monopolistic competition conditions. Poi in case
Point
being; risk taking, revenue diversity and regulatory diversity are critical
aspects in estimating market power. In terms of the soundness of its banking
erms
system, Zambia was ranked 56 out of 148 countries in the World Economic
s
Forum Global Competitive Index 2013 -2014. Meanwhile, Commercial Banks
2014.
branches per 1,000 square km is ~0.45 as ATMs per 1000 square km equals to
0.86. ATMs per 100,000 adults were around 8.58 in 2012. Fig 3 shows the
Zambian Banking sector development.
Fig 3: Zambia’s banking sector development
GDP per Capita (GDP*) US$
1,469
Banks
19
GDP* to Banks (The greater the Number the Less Banked the
Population, relative to other comparable)
77.32
Bank Loans /GDP (%)
15.61
Deposits /GDP (%)
23.64
Deposit Accounts per 1000 Individuals
-
Bank Branches/100 000 Individuals
4.44
WEF Soundness of Banks (Score 1-7) (Score 1-7, Most Preferable =
7)
5.3
Sources: World Economic Forum and IMF
An in depth analysis for the Zimbabwean Banking Sector 2013
8. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Tanzania
........Backed by improved performance in
the
manufacturing,
mining,
trade
(wholesale and retail) and transport and
communication activities the country’s real
GDP growth rate further increased albeit
marginally from 6.4% in 2011 to 6.9% in
2012.......
Tanzania is classified as a “Low Income” country by the IMF with an
estimated population of 47.78 million(2012). In the World Economic Forum
.
Global Competitive Index 2013 -2014, the country was ranked 125 out of
2014,
148 countries. Its real GDP growth averaged 6.8% in the period between
2008 and 2010. Backed by improved performance in the manufacturing,
mining, trade (wholesale and retail) and transport and communication
activities, the country’s real GDP growth rate further increased albeit
marginally from 6.4% in 2011 to 6.9% in 2012. In the medium term, gr
growth
forecasts are expected to remain strong at an identical 7.0% in 2013 and
2014 respectively.
GDP (PPP) Per Capita (Int'l $), 1990 to 2012
1400
1200
2500
1000
2000
800
1500
600
1000
400
500
Tanzan
ia
SubSaharan Africa GDP*
3000
200
0
0
Tanzania
SSA GDP* (ppp) US$
Sources: World Bank and IMF
......Limited geographical distribution of
banks saw a mere 14% of bankable
population captured......
Banking Sector
Tanzania houses 45 Banks; but, however, due to the limited geographical
distribution of banks within the national boundaries, it seems there is an
influx of banks in major cities resulting in a mere 14% of the bankable
population being captured. Against this background, the banking sector is
characterised by a oligopolistic competition marke structure with five
market
banks controlling 85 per cent market share in terms of total industry assets,
loans and customer deposits. The top banks in the market in t
terms of total
assets in context are CRDB, NMB, NBC, Standard Chartered and Exim.
Meanwhile the economy was ranked 114 out of 148 countries in the World
Economic Forum Global Competitive Index 2013 -2014 in terms of the
soundness of its banks.
In Tanzania, 90% of deposits are in the hands of ei
eight banking institutions,
notably, three local banks and five foreign banks.
An in depth analysis for the Zimbabwean Banking Sector 2013
9. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Fig 4: Tanzania’s banking sector development
GDP per Capita (GDP*) US$
609
Banks
45
GDP* to Banks (The greater the Number the Less Banked the
Population, relative to other comparable)
13.53
Bank Loans /GDP (%)
33.11
Deposits/GDP (%)
-
Deposit Accounts per 1000 Individuals
186.71
Bank Branches/100 000 Individuals
2.21
WEF Soundness of Banks (Score 1-7) (Score 1-7, Most Preferable =
7,
7)
3.5
Source: World Economic Forum and IMF
Namibia
.....The economy heavily relies on the
extraction and the processing of minerals
for export.....
Namibia is an economy that heavily relies on the extraction and the
processing of minerals for export. The Mining sector accounts for 8% of
GDP while providing more than 50% of foreign exchange earnings. Coming
off a negative (-1.1%) in 2009, its GDP averaged 5.6% in the period between
1.1%)
2010 and 2012, aback a higher- than- expected diamond and uranium
production, as well as resilient growth of wholesale and retail trade. The
ll
domestic economy is expected to grow by 4.7% and 5% in 2013 and 2014
omestic
respectively; and was ranked 90 in a list of 148 countries in the World
Economic Forum Global Competitive Index 2013 -2014. The country has a
population that compares favourably among less economically developed
countries at ~2.3 million. As a result, Namibia's per capita GDP is relatively
high among developing countries, at around $5.7
$5.702, but, however, the
country has one of the most unequal income distribution patterns o the
ost
on
African continent. Meanwhile, the pegging of the local currency to the rand
has helped reduce inflation and provided predictability in exchange
markets. Below is GDP per Capita compared to the SSA.
SubSaharan Africa GDP*
3000
7000
6000
5000
4000
3000
2000
1000
0
2500
2000
1500
1000
500
0
Namibia
Sources: World Bank and IMF
An in depth analysis for the Zimbabwean Banking Sector 2013
SSA GDP* (ppp) US$
Nami
bia
GDP (PPP) Per Capita (Int'l $), 1990 to 2012
10. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Banking System
....Banking sector is mature and wellestablished....
Namibia’s banking sector is mature and well-established comprising of 4
established,
commercial banks and one Micro-Finance bank While the economy’s
Finance bank.
banking system soundness was ranked 23 out of 148 countries in the World
Economic Forum Global Competitive Index 2013 -2014, however, key
aspects of concern have been among others, limited competition amongst
hers,
banks, shallow financial markets, inadequate and less effective regulation,
limited access to financial services and lack of customer protection and low
financial literacy.
Fig 5: Namibia’s banking sector development
GDP per Capita (GDP*) US$
5,705
Banks
5
Banks to GDP*( The greater the Number the More Banked the
Population)
1,141
Bank Loans /GDP (%)
47.82
Deposits/GDP (%)
42.79
Deposit Accounts per 1000 Individuals
739.56
Bank Branches/100 000 Individuals
7.19
WEF Soundness of Banks (Score 1-7, Most Preferable = 7)
7,
5.9
Source: World Economic Forum and IMF
Mozambique
Mozambique is a member of World Trade Organisation (WTO). It is
categorised as a “Low income” country by the IMF, and has an estimated
population of 25.2 million. Despite weak ranking at 137 i a list of 148
in
countries in the World Economic Forum Global Competitive Index 2013 2014, and also the lowest human development indexes in the world (ranked
th
184 out of 187 countries in the United Nations Development Pro
Programme
Human Development Index); the country is one of the rising economies in
the African continent. It’s GDP averaged 7.2% over the last decade.
Real GDP is forecasted to average 8.1% in the period between 2013 and
2017 prior to the progressive increase in coal production and the
ncrease
implementation of large infrastructure projects, coupled with credit
expansion.
An in depth analysis for the Zimbabwean Banking Sector 2013
11. Zimbabwe Banking Sector’s Competitive Landscape 2013
October 17, 2013
3000
900
800
700
600
500
400
300
200
100
0
2500
2000
1500
1000
500
0
Mozambique
Mozam
bique
SubSaharan Africa GDP*
GDP (PPP) Per Capita (Int' $ ),1990 to 2012
SSA GDP* (ppp) US$
Sources: World Economic Forum and IMF
.....Soundness of the sector is compromised
by little competition in-as-much about 85%
of the total financial sector’s assets are
concentrated in the three largest banks…….
Banking System
Mozambique’s banking sector is made up of 18 Banks. However, the
soundness of the sector is compromised by little competition in
in-as-much
about 85% of the total financial sector’s assets are concentrated in the
three largest banks; which are closely linked to the Portuguese banking
industry. Soundness of banks in Mozambique was ranked 77 out of 148
.
countries in the World Economic Forum Global Competitive Index 2013 2014, but however, the Mozambican Banking Sector as a whole has
remained well capitalised.
Fig 6: Mozambique’s banking sector development
GDP per Capita (GDP*) US$
579
Banks
18
GDP* to Banks (The greater the Number the Less Banked the
Population, relative to other comparable)
32.17
Bank Loans /GDP (%)
27.50
Deposits/GDP (%)
39.65
Deposit Accounts per 1000 Individuals
171.36
Bank Branches/100 000 Individuals
3.78
WEF Soundness of Banks (Score 1-7) (Score 1-7, Most Preferable
7,
= 7)
4.9
Source: World Economic Forum and IMF
An in depth analysis for the Zimbabwean Banking Sector 2013
12. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Kenya
......we anticipate a period of improved
stable governance and strong growth
following the election of Kenyatta, as the
new president for Kenya.........
Kenya is a sovereign state in East Africa lying on the Equator with the Indian
Ocean to the South-east. The economy covers ~581,309 square kilometres
east.
with a total population of 43.4 million in 2012. Its average GDP growth rate
was 4.8% between the period 2004 and 2012. GDP growth is forecast to
tween
accelerate to an average rate of 6.5% between 2013 and 2017. In our view,
we anticipate a period of improved stable governance and strong growth
following the election of Kenyatta, as the new presid
president for Kenya.
The economy is expected to gain significant traction from recent discoveries
of oil and gas. The sector (oil and gas) is expected to contribute 3% to GDP
within 48 months, but however this is subject to the ability of the economy
to mobilise the required capital and human resources. Despite being one of
se
the major drivers for GDP growth in the SSA region, the country is classified
as a “Low Income” country by the World Bank, with per capita GDP of
around $865. It was ranked 96 in the World E
Economic Forum Global
Competitive Index 2013 -2014.
SubSaharan Africa GDP*
3000
1550
1500
1450
1400
1350
1300
1250
1200
1150
2500
2000
1500
1000
500
0
Kenya
Kenya
GDP (PPP) Per Capita (Int'l $), 1990 to 2012
SSA GDP* (ppp) US$
Source: World Economic Forum and IMF
Banking Sector
The Kenyan banking sector comprises 47 banks mainly located in major
towns. While the economy has a population of around 43.4 million, 32% of
the bankable population is excluded from financial services. However, by
regional standards Kenya’s financial system is relatively well developed and
diversified.
The sector was ranked 67 out of 184 countries in
in-terms of the soundness
of banks in the World Economic Forum Global Competitive index 2013
d
20132014. The Banking sector accounts for 40% of the country’s GDP. Fig 7
below explains the banking sector development in Kenya.
An in depth analysis for the Zimbabwean Banking Sector 2013
13. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Fig 7: Kenya’s banking sector development
GDP per Capita (GDP*) US$
865
Banks
47
GDP* to Banks (The greater the Number the Less Banked the
Population, relative to other comparable)
18.4
Bank Loans /GDP (%)
44.56
Deposits/GDP (%)
59.81
Deposit Accounts per 1000 Individuals
662.26
Bank Branches/100 000 Individuals
5.49
WEF Soundness of Banks (Score 1-7, Most Preferable = 7)
7,
5.1
Source: World Economic Forum and IMF
Malawi
....Economy is one of Africa’s poorer and is
categorised as a “Low Income” country by
the World Bank.....
Malawi is one of Africa’s poorest and is categorised as a “Low Income”
country by the World Bank. It was ranked 136 out 148 countries in the
World Economic Forum Global Competitive index 2013
2013-2014. It’s average
GDP growth rate was 4.7% in the period betwee 2004 and 2012. Economic
between
growth acceleration is forecasted to average at 5.3% in the period 2013
through 2017. Due to poor economic management, the country was ranked
157 out of 185 for Ease of Doing Business.
Malawi has an estimated population of 15.9 million, and a total GDP of 4.3
billion, translating to Per Capita GDP of $268; the lowest in the region. With
a current 2.8% annual growth, the Malawian population is expected to
triple by 2040. Implications are astounding against the current status quo
that the country is already densely populated with 139 persons/square
kilometre while half of the population is living below the poverty datum line
and more than one third consumes less than the required caloric intake.
The swearing in of Joyce Banda, as the president of Malawi is expected to
take the economy to its next level of growth, aback a quick introduction of
economic and political reforms.
An in depth analysis for the Zimbabwean Banking Sector 2013
14. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
3000
900
800
700
600
500
400
300
200
100
0
Sub-Saharan Africa GDP*
2500
2000
1500
1000
500
0
Malawi
Malawi
GDP (PPP) Per Capita (Int'l, $), 1990 to 2012
SSA GDP* (ppp) US$
Source: World Economic Forum and IMF
Banking Sector
....Banking sector comprise banks which are
well capitalised and profitable....
The country’s banking sector is made up of 12 banks, which are well
capitalised and profitable. However, the sector lacks competition with
competition,
three major banks accounting for more than 70% of total market assets and
deposits. The access of financial services remains very limited with most
banks concentrated in major towns, implying that there is scope to attract
entrated
the unbanked population living in the rural areas where entrenched land
tenure traditions complicate both property rights and the use of land as
collateral. It should be noted that around 85% of total population lives in
rural areas. The sector was ranked 68 out of 148 in terms of the soundness
of banks in the World Economic Forum Global Competitive index2013
index2013-2014.
Fig 8: Malawi’s banking sector architecture
’s
GDP per Capita (GDP*) US$
268
Banks
12
GDP* to Banks (The greater the Number the Less Banked the
Population, relative to other comparable)
Bank Loans /GDP (%)
22.33
Deposits/GDP (%)
39.45
Deposit Accounts per 1000 Individuals
242.67
Bank Branches/100 000 Individuals
3.35
WEF Soundness of Banks (Score 1-7) (Score 1-7, Most Preferable
7,
= 7)
5.1
Source: World Economic Forum and IMF
An in depth analysis for the Zimbabwean Banking Sector 2013
28.58
15. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Ghana
.......Economic growth prospects are very
strong with real GDP forecast averaged
5.7% in the period between 2013 and 2017,
attainable through sound macroeconomic
management........
Ghana is a “Lower Middle Income” country with an estimated population
of 25.4 million(2012). The economy is predominantly agriculture, with 60%
of the total population engaged in subsistence agriculture. Its GDP growth
rate averaged 7.1% in the period between 2004 -2012, reaching its all-time
high of xxx in 2011, following the start-up of oil production in the last
up
quarter of 2010. Economic growth prospects are very strong with real GDP
forecast averaging 5.7% in the period between 2013 and 2017, attainable
through sound macroeconomic management. The co
country was ranked 114
out of 148 countries in the World Economic Forum Global Competitive
index 2013-2014.
Subsaharan Africa GDP*
3000
1800
1600
1400
1200
1000
800
600
400
200
0
2500
2000
1500
1000
500
0
Ghana
Ghana
GDP (PPP) Per Capita (Int'l $), 1990 to 2012
SSA GDP* (ppp) US$
Source: World Economic Forum and IMF
Banking Sector
25 Commercial Banks operate in the economy of Ghana. The economy is
relatively under-banked with 479 people with deposits account per 1000
banked
individuals. Number of Bank branches per 1000 individuals stood at 5.7.
GDP per Capita (GDP*) US$
1562
No. of Banks
25
GDP* to Banks( The greater the Number the less Banked the
(
Population relative to other comparables)
62.48
Bank Loans /GDP (%)
17.82
Deposits/GDP (%)
23.94
Deposit Accounts /1000 Individuals
479.47
Bank Branches/100 000 Individuals
5.73
WEF Soundness of Banks (Score 1-7) (Score 1-7, Most Preferable
7,
= 7)
5.5
Source: World Economic Forum and IMF
An in depth analysis for the Zimbabwean Banking Sector 2013
16. Zimbabwe Banking Sector’s Competitive Landscape 2013
October 17, 2013
Zimbabwe Over/Under Banked? - Conclusion
..............Only 14% of the Zimbabwean
population have access to formal banking
services.......
In a country with a population of ~13.7 million at a GDP of 10.81 billion
housing 22 Banks and over one hundred micro
micro-finance institutions, one
could easily jump to the conclusion that Zimbabwe is overbanked; however,
our estimates have revealed; that only 14% of the total population have
access to the formal banking services. This is possibly attributed to limited
penetration of Banks in capturing the unbanked rural population and the
thriving informal sector.
In Zimbabwe, most banks are located in major towns and cities due to the
traditional view that towns and cities offer better business compared to the
rural areas, thereby leaving the rural community excluded from financial
services. Against this background, there is scope for underwriting more
st
business in rural areas if banks think strategically to mobilise t
the
agricultural based deposits. Rural population in Zimbabwe accounts for 62%
of the total population. Zimbabwe’s rural population s
still yearns for
financial inclusion like in the Case of Bangladesh (Grameen Bank) and
Kenya (Equity Bank) which transformed the landscape of financial services
development in those respective countries. Meanwhile, the bulk of the
urban population is involved in the informal sector (estimated at around
lved
25% of GDP) and remains largely unbanked to date
date.
n
On comparable basis, Zimbabwe in the pack of the selected SSA countries
is positioned the least in terms of Deposits Accounts per 1,000 individuals at
139. Point in case being, on average only 139 individuals out of 1,000
people have Bank deposit accounts thus leaving 861 people excluded in the
banking system.
Relative to the selected countries, Per Capita GDP to number of banks at
34.38 indicates that one bank on average captures a potential maximum
income of $34.38 per individual. Compared to Namibia where one bank has
the potential to capture the maximum of $1,114 it would seem there is
1,114
more room for more banks in Namibia than in Zimbabwe. However, coming
off a low base we see immense potential to grow the pie (Per Capita GDP),
creating justification for further investment in the sector.
All in all, the Zimbabwean economy is under-banked in the sense that the
banked
larger population is unbanked (excluded from the financial system) and a
significant portion of those with access to financial services only participate
in the very basic forms of financial services-limited use of plastic money,
limited
mobile banking and other advanced ancillary services.
An in depth analysis for the Zimbabwean Banking Sector 2013
17. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Zimbabwe Banking Sector:
Investment Case: Positives
.....A less aggressive approach on the
empowerment and indigenisation proposed
across sectors ......
There is a large number of unbanked people, creating scope for more
business and higher margins
Room to increase the assortment and scope of available services thereby
opening diversified revenue streams for the sector e.g. mobile banking,
plastic money and other ancillary services.
Rationalisation of regulatory landscape with regards to indigenisation and
empowerment law is expected to easy uncertainty in the sector.
ted
Key sectors remain unfunded despite displaying immense potential for
profitability given adequate support; this profitability of key sectors will
have positive spill-over effects in the banking system.
over
Investment Negatives
Potential populist policies to placate political expectations citing the
cancellation of local authority assets (amounts owed) and potential freezing
of debts for farmers could have ripple effects across key economic sectors
and the banking sector is not spared
Continued funding constrains could hamper economic growth prospects
thereby affecting the credit creation role of the banking sector.
Banking Sector Overview
.........Zimbabwe Banks compete
aggressively to earn revenue give the
nature of competition in the market...........
Zimbabwe’s banking sector is comprised of 22 Commercial Banks, 4 Building
societies, 2 Merchant Banks and one savings bank Approximately 70% of
bank.
the market share is accounted for by the first 5 banks For banks to earn
banks.
revenue they need to compete aggressively given a blend of a monopolistic
and oligopolistic competition market structures. The graph below depicts
.
the architecture of Zimbabwe’s financial system.
Listed
Banks
Unlisted
Banks
Merchant
Banks
Building
Societies
Savings
Bank
BancABC
AGRI-BANK
CABS
POSB
BARCLAYS
STANCHART
Capital
BANK
TETRADE
CBZ
STANBIC
CBZ
FBCH
MBCA
ZB
NMB
METBANK
ZB
ZABG
AFRASIA
Suspended
ECOBANK
TRUST
STEWARD
An in depth analysis for the Zimbabwean Banking Sector 2013
Micro
Finance
Institutions
:172
FBC
18. Zimbabwe Banking Sector’s Competitive Landscape 2013
October 17, 2013
Sector Developments
......Over the last 6 months the banking
sector along with the economy at large
battled with a myriad of economic and
operational challenges prompting a series
of changes for the quest of adaptation.
Recent legislation in the Sector, includes
the Memorandum of Understanding which
stipulated changes to fees and commission
charges as well as interest on deposits, this
piled pressure on the Banks which were still
making
efforts
to
comply
with
Capitalization requirements........
RBZ signs MoU with Financial Institutions.
Trust Bank is suspended from the ZSE, struggles to find strategic Equity
partners.
TN Bank is acquired by Econet consequently changing to Steward Bank.
Non Performing Loans escalate to 13% justifying the need for cautionary
lending practices.
FBC proposes to merge the Bank and the Building society, NSSA gives up
stake in FBC Building Society for more shareholding in FBCH,
NMB secures strategic foreign investors who take up 26.85% in efforts to
vestors
boost the capital base.
AfraAsia Group buys out Kingdom bank founder Nigel Chanakira to acquire
controlling stake in the Financial services group and rebrand to Afr
AfraAsia
Holdings
ndigenization
Enforcement of the empowerment and Indigenization law in the banking
sector sparks controversial debate in economic and political circles.
Lines of credit remain confined to the conservative regional facilities as the
economic climate shrinks in the shadow of political uncertainties with mo
most
foreign Institutional Investors taking an extended cautionary stance
stance.
Operational Environment
Developments in the First half pointed to sings of a stagnating economy
envisaged through under performance in key sectors particularly
Agriculture and Mining.
Growth in key sectors has been confronted by easing international
commodity prices, squat investment, constricted credit conditions and
extended policy uncertainty in the post-election environment.
election
Private investment is projected at 6.3% of GDP in 2013 while public
investment remains low at 4.4% due to the overcrowding effect of recurring
expenditure.
The trade deficit is expected to widen under pressure from volatile global
commodity prices and lack of competitiveness and downside risks
ck
associated with the fragile global economy and limited capacity in key
sectors.
The Mining and Agriculture sector are expected to continue as the leading
contributors to exports and national output
Implementation of the staff monitored program with IMF and the World
Bank is expected to aid in external debt relief despite signs of the process
stagnating largely due to the political processes. Proper implementation will
have profound effect on the ability to source e
external financial and
technical support.
An in depth analysis for the Zimbabwean Banking Sector 2013
19. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Sector Performance: Half Year 31 June 2013
f
Total Assets
....Total Banking Assets grew 10%.....
Total Banking Assets grew 10% from US$4 billion reported at the same time last year
to US$4.45 billion as at June 2013. Deposits continue to constitute most of the
banking sector assets at 80% while Loans anchor at 61.5% of Total Assets.
Total Assets Breakdown
$1,400.00
$1,200.00
CBZ
BancABC
STAN CHART
STANBIC
FBC
BARCLAYS
ZB
NMB
METRO
MBCA
ECOBANK
AGRIBANK
POSB
ZABG
KINGDOM
TN BANK
$1,000.00
$800.00
$600.00
$400.00
$200.00
$-
Loans and advances
Other Assets
Cash and Equivalents
Source: Various Banks Financials
Share of Assets
The top five Banks in terms of Assets account for more than 65 of the Total Banking
65%
Sector Assets at US$2.9 billion leaving room for mergers and acquisitions at the lower
end of the command chain in efforts to consolidate capacity and capitalization.
TN BANK
KINGDOM ZABG POSB AGRIBANK
ECOBANK
MBCA
METRO
NMB
CBZ
ASSETS % PER BANK
ZB
BARCLAYS
BancABC
FBC
STAN CHART
Source: FBC Databases
An in depth analysis for the Zimbabwean Banking Sector 2013
STANBIC
20. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Total Deposits
......With market wide liquidity constrains
deposit base is expected to remain below
the $4.5 billion mark..........
Total deposits for the period at US$3.558 bil were slightly lower than the
US$3.281 bil at the close of June 2012.
YTD total deposits have declined 19.3% from December 2012’s US$4.410 bil
to US$3.558 bil as at June 2013.
Deposit sources remain largely skewed to corporate accounts which
emain
accounted for 50.65% of deposits, trailed by banking institutions at 16.33%
and Individuals at 14.3%.
With the economy grilling in liquidity constraints in its recovery mode, the
Deposit base is expected to remain below the US$4.5 billion mark with the
bulk of deposits remaining transitory in nature.
In terms of deposit mobilization capabilities, CBZ Bank had the lion’s share
of deposits with 31.58% followed by BancABC with9.75%, Stanbic 9.75%,
Stanchart 9.25% and FBC with 7.04%.
Deposits US$ Mil
CBZ
BancABC
STAN CHART
STANBIC
FBC
BARCLAYS
ZB
NMB
METRO
MBCA
ECOBANK
AGRIBANK
POSB
ZABG
TN BANK
KINGDOM
$-
$200.00
$400.00
$600.00
$800.00
$1,000.00 $1,200.00
Source: FBC Databases
Loans and Advances
Total loans and advances in the sector grew by 15.5% to close the Half year
at US$2.74 bil from US$2.37 bil in the prior year.
il
The Loan to Deposit ratio for the Industry shed 2.42% to close at 77%
against 79.42% achieved last year. The decline in the ratio is indicative of
the cautious approach that is being adopted by many Banks in the wake of
escalating credit risk concerns.
Incumbent liquidity constraints fuelled by the lack of long term reasonably
cumbent
priced facilities owing to a plethora of country and sector specific Risk
concerns have restricted lending to short term facilities. Deposits remain
transitory in nature as households and corporate barely meet operational
s
cash flow requirements.
Of the 16 surveyed Banks 7 had L/D Ratios above the Average 77% while
the other 7 pursued a more conservative approach with L/D ratios below
the average. Despite accounting for only 1.8%, 2%
%
An in depth analysis for the Zimbabwean Banking Sector 2013
21. Zimbabwe Banking Sector’s Competitive Landscape 2013
October 17, 2013
Cont’d...
and 2.2% of total Deposits respectively, Agribank, POSB and Ecobank had
L/D ratios above 100% as they drew down on advanced facilities.
Barclays bank remained true to its conservative philosophy in the volatile
operating environment with a L/D ratio of 42% a
against a 6.5% share of total
Deposits while Allied Bank recorded the least activity on both fro
fronts with
the least L/D ratio of 21% riding on 0.5% share of deposits.
Save for Stanbic Bank, the remaining Foreign Banks had a more
conservative approach to lending, in a view this was in response to
ing,
empowerment law pressure and re-priced country risk status.
priced
Stanchart had a L/D ratio below average (70%) despite commanding a
significant share of deposits (9.2%). MBCA had a L/D ratio of 66% against a
4.2% share of Deposits.
Sector Lending Spread
......key sectors continue to battle for
recovery in the wake of working capital
constraints, operational redundancies and
competition from lower cost structure
regional players.....
Still haunted by the misfortunes of the former decade of economic decline,
key sectors continue to battle for recovery in the wake of working capital
constraints, operational redundancies and competition from lower co
cost
structure regional players.
Funding to key sectors has remained inadequate to fully suffice the desired
funding needs.
The source of funds coupled with the operational risk attached to the real
sectors and the huge recapitalization gap all together pr
present causes for
concern for institutions funding Real Sector players.
The Agriculture sector took home the most funding with over US$494.5 mil
while the Distribution sector took home US$439.7 mil, the Manufacturing
sector borrowed slightly more than the services sector at US$364.8 mil and
US$353.3 mil respectively.
Key sectors remain starved of the much needed funding as lines of credit
remain short term and vulnerability risk factors continue to keep Investors
at bay.
The escalating deterioration of asset quality across the sector evidenced by
et
last year’s growth in none performing loans (13%) prompted lenders to
adopt more prudent lending and credit management procedures and more
rigorous collection efforts, consequently seeing the Ratio of Loan loss
provisions to Total loans declining 0.19% from 0.61% to 0.42%. POSB had
the highest ratio of Impairment charges to Loans at 3.34% trailed by Agri
Agrilender Agribank with 2.24% in the wake of a poor farming season w
which
affected yields. BancABC recorded 1.33% after a court ruling went against
.
their fortunes in an outstanding non performing loan case.
An in depth analysis for the Zimbabwean Banking Sector 2013
22. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Loan to deposits
CBZ
BancABC
STAN CHART
STANBIC
FBC
BARCLAYS
ZB
NMB
METRO
MBCA
ECOBANK
AGRIBANK
POSB
ZABG
TN BANK
KINGDOM
$-
$500.00
$1,000.00 $1,500.00 $2,000.00
Deposits (US$ Mil)
Loans (US$ Mil)
Source : FBC Databases
Loan / Deposits Ratio
CBZ
BancABC
STAN CHART
STANBIC
FBC
BARCLAYS
ZB
NMB
METRO
MBCA
ECOBANK
AGRIBANK
POSB
ZABG
TN BANK
KINGDOM
73%
109%
70%
89%
70%
42%
64%
82%
83%
66%
103%
155%
58%
21%
0%
0%
0%
50%
100%
Loan / Deposits
Source: FBC Databases
An in depth analysis for the Zimbabwean Banking Sector 2013
150%
200%
23. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
Profitability
.....Sector profitability tumbled in the wake
of revenue restricting developments in the
overall economy due to both economic and
political events that affected H1 2013.....
Overall sector profitability tumbled in the wake of revenue restricting
developments in the overall economy due to both e
economic and political
events that affected H1 2013.
Profit before taxation was down 14% at US$54.2 mil vs US$63.3 mil
attained in H1 of 2012, inevitably after tax profits plummeted 21% at
US$36.6 mil compared to US$46.3 mil for the same period last year.
Foreign Banks registered the most significant growth in profits over the six
months period, with the strongest growth in profitability being recorded in
Ecobank which registered a 2370% jump in PAT from US$ 47 000 to US$1.16
million, Barclays bank which had in the past adopted a more t
d
than
conservative approach is showing signs of interest to fully commit its
resources in the Zimbabwean financial services sector after posting a 37.2%
increase in PAT to US$1.14 mil vs a prior year US$0.83 mil.
Average PAT for the Industry for the 14 Institutions in the review was at
US$2.62mil vs US$3.31 mil for last year while Total ROA settled at 0.82%
against 1.15% for the same period last year. Average ROA for the period
was at 0.29% indicative of the inability of many Banks to fully sweat their
Assets and maximize return; pulling down the average were losses in Allied
Bank, Agribank and POSB. The average ROE was at 3.73%.
Weighing down on after tax sector profits was the 13% growth in operating
expenses which more than offset the 24% increase in Net Interest Income
after impairment charge. The overall effect of the MoU on charges and fee
he
income was offset by other Non Interest income avenues as Non Funded
income remained flat at US$150 mil.
The use of electronic and mobile banking services remains key in containing
bile
operational costs, while product and service ingenuity remains pivotal in
supplementing revenue streams affected by the MoU.
$10,000,000.00
Net Income US$
$8,000,000.00
$6,000,000.00
$4,000,000.00
$2,000,000.00
Source: FBC Securities Databases
An in depth analysis for the Zimbabwean Banking Sector 2013
TN BANK
KINGDOM
POSB
ZABG
AGRIBANK
MBCA
$(6,000,000.00)
ECOBANK
METRO
ZB
NMB
FBC
BARCLAYS
STANBIC
STAN CHART
$(4,000,000.00)
CBZ
$(2,000,000.00)
BancABC
$-
24. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
ROA/ROE
20.00%
15.00%
10.00%
5.00%
ROA
ZABG
BARCLAYS
FBC
POSB
ZB
MBCA
CBZ
-15.00%
STANCHART
NMB
INDUSTRY
METRO
STANBIC
Agribank
BancABC
ECOBANK
-10.00%
TN BANK
-5.00%
KINGDOM
0.00%
ROE
Income source
....Total Net Interest Income to Total
Income which, by International Standards
should be between 65% and 75% was at
51% for the Industry against 47% for the
same period last year.....
Total Net Interest Income to Total Income, which by International Standards
st
should be between 65% and 75% was at 51% for the Industry against 47%
for the same period last year.
Sound banking practice detects that net Interest income should be the main
income source for lending financial institutions. Low Interest I
ome
Income to
Total Income reflects the country’s inability to access and increase lines of
credit owing to a number of country specific factors.
In co m e So u r ce US$ M il
$160.00
$140.00
$120.00
$100.00
$80.00
$60.00
$40.00
$20.00
Total Operating Income net Intrest expense
Non Intrest Income
An in depth analysis for the Zimbabwean Banking Sector 2013
TN BANK
KINGDOM
POSB
Intrest Income
ZABG
AGRIBANK
ECOBANK
MBCA
METRO
NMB
ZB
BARCLAYS
FBC
STANBIC
BancABC
STAN CHART
CBZ
$-
25. October 17, 2013
Zimbabwe Banking Sector’s Competitive Landscape 2013
The Average Interest Margin for the sector was at 62% buoyed by high
margins in Barclays (82%), Stanbic (~95%), Stanchart (94%) and the trio of
Ecobank, POSB and MBCA with 70.8%, 70.7% and 70% respectively among
others. Lower margins were recorded in the books of Allied (18%), FBC
(44%), AgriBank (51%) and CBZ (52%) among a few other Banks.
Interest Margins
$90.00
$80.00
$70.00
$60.00
$50.00
$40.00
$30.00
$20.00
$10.00
$$(10.00)
Intrest Income
Net Income
Sector Outlook
.....A change of face in the relevant Ministry
suggests the possibility of a softer
approach towards enforcement of
indigenization and Empowerment law in
the financial services sector.....
Going forth, as already experienced, the MoU will continue to exert
pressure on margins in the form of higher cost of funds and lower fees and
commission income, financial ingenuity is key in circumventing the
downside effects of the MoU.
Central Bank regulation is expected to intensify in efforts to ensure
adequate capitalization levels as well as to ensure systematic stability
through compliance with global Banking supervision frameworks like Basel
h
Basel.
Pressure to adhere to specific lending guidelines to support economic
recovery is also expected to come from various economic and political
spheres.
A less aggressive drive towards enforcement of indigenization and
Empowerment law in the financial services sector is expected from the new
government cognizant of the sector’s sensitivity, and the role of financial
intermediation to Economic recovery and growth. (A change of face in the
relevant Ministry suggests the possibility of a softer approach)
Industry facade is set to change as corporate finance and restructuring
activity gains momentum from capitalization endeavo
endeavours, mergers,
acquisitions, disposals, equity partnerships and Convertible financing
als,
arrangements are expected to mark the landscape of the financial services
sector in the coming period.
An in depth analysis for the Zimbabwean Banking Sector 2013
26. Zimbabwe Banking Sector’s Competitive Landscape 2013
October 17, 2013
Point of Argument
.....Unlocking Potential through policy
transformation and integration....
By nature of its intermediary role, the banking sector is a centre piece for
all economic revitalisation efforts, as such, government is expected to give
,
precedence to capacitating the sector which by transmission mechanism
will ultimately have positive spiral effects on overall sector performance.
Incapacitated key sectors of the economy posse immense potential and
demand for financial services and products. This cascades into a justifiable
call for investment into the banking sector.
Current efforts by the regulatory authorities have gone a long way in
creating a sound and enabling operating environment that encourages
rating
free market forces to take their course without prejudice to stakeholders.
Recent capitalisation thresholds and the MoU are all a thrust towards
creating a sound banking system. Gazetted capital thresholds give the
sector the muscle to prudently underwrite more business.
r
Politics is now water under the bridge, at the moment, the thrust is of
economic centre force creating an enabling platform for business recovery,
growth and development across all sectors which prolifera
proliferates a multiplier
effect on the sector.
Overall, Zimbabwe’s banking sector carries huge probability to
reward investors with positive alpha returns at moderate risk
exposures as investors seek to diversify their portfolios, citing
vulnerabilities in developed markets.
An in depth analysis for the Zimbabwean Banking Sector 2013
27. Zimbabwe Banking Sector’s Competitive Landscape 2013
The End.........
An in depth analysis for the Zimbabwean Banking Sector 2013
October 17, 2013