|Gono chides banks|
|Wednesday, 08 August 2012 00:00|
banks’ profitability over the 12 months to June 30 this year.
About half of the 15 banking local institutions analysed recorded losses amounting to US$9 million in the full year to June 2011.
Dr Gono also blasted the smaller banks’ alleged surreptitious manoeuvres to block his recent directive to increase minimum capital levels by up to 900 percent.
“Banking institutions with low capital levels, such as Royal Bank and ZABG, as well as those with illiquid capital such as Agribank and Trust, have higher incidence of reporting losses.”
Addressing bankers following a letter of appeal from the BAZ for a downward revision of minimum capital levels, Dr Gono said banks with higher capital had greater loss absorption capacity and resilience to shocks.
“The letter was never authorised nor signed by me as president of BAZ, nor any view of the majority of BAZ,” said Mr Guvamatanga.
The RBZ raised minimum capital levels for building societies from US$10 million to US$80 million, discount and finance houses from US$7,5 million to US$60 million and US$5 million from US$1 million for asset management firms.
According to the RBZ, Trust Bank suffered US$2,19 million loss, Agribank US$2,42 million, ZABG US$1,2 million, Royal US$690 000 and Interfin US$80 million in June this year. Most banks controlled by foreign shareholders and with higher capital levels have posted profits over the period under review.
“It is very strange that the very people who are supposed to be strengthened are crying foul. Are we going to wait for outsiders (IMF) to tell us to strengthen ourselves?” asked Dr Gono.
The letter signed by BAZ vice-president Mr Malaba and copied to the Office of the President and Cabinet and Ministry of Finance implored the RBZ for a revision of minimum capital levels to US$20 million for commercial banks by December this year.