I was chatting to a banker on Saturday at work. He’d come to buy a few seedlings for his veggie garden and we struck up a conversation. He is with the agri-banking sector of ZB Bank, formally known as Zimbank. The government has a share in it and it is one of the banks that has been affected by the US and European sanctions so they have been treading a conservative line. He asked how my business was going and I replied that it was very slow; in my opinion there was just not money available for loan at realistic interest. He agreed that rates of 25% or more were stifling lending but that around April ZB was getting a cash injection from an investor. I speculated that it was part of Robert’s “Look East” (to Malaysia) policy. No, the banker replied, this is look south. I assumed he meant South Africa. He just laughed.
I mentioned that I banked with CBZ (Commercial Bank of Zimbabwe). He raised his eyebrows and cautioned me to be careful. Now I’ve had nothing but good service from my branch of CBZ ever since I pulled my corporate account away from Barclays for utterly dismal service some years ago. When pressed he told me that CBZ are in good financial shape because the government is using them as the national bank so if normality ever returns and the Reserve Bank resumes banking to the government as it should, CBZ will not have the reserves that it enjoys today and could collapse. I asked if I could pick that up in the CBZ annual report. He laughed – it seems there are many ways to hide accounts from auditors.
CBZ started out as BCCI (Bank of Credit and Commerce International) which was known locally as Bank of Crooks and Conmen International. It was Pakistani founded with major middle east shareholders and went belly up in spectacular way some years back (check out the Wikipedia reference for some entertaining reading). The government here bought out the local concern and it was mostly owned/run by Gideon Gono who has been in charge of the Reserve Bank for some years though he apparently has a reduced role in CBZ these days. Some years back ABSA, a big South African banking group, bought around 23% of CBZ shares and it was seen as a mark of approval. CBZ have since bought back those shares. While most other Zimbabwe banks are battling the stagnated economy CBZ is apparently blooming. One has to ask how they have done it.
Maybe it’s time to open another corporate account with a bank that makes less use of smoke and mirrors.
Zimbabwe Absurdity 