Ndamu Sandu
2 April 2006
WHILE small financial institutions were talking of mergers and consolidation ahead of the 30 September 2006 US dollar-linked new capital requirement deadline, the "big boys" in the sector are well cushioned after joining the trillion- dollar league in profitability.
Financial results for the year ended 31 December released in the past month distinctly show the "who is who" of the sector.
Under the new dispensation set out by the Reserve Bank (RBZ), commercial banks are required to have US$10 million ($1 trillion), merchant banks, building societies and finance houses US$7.5 million ($750 billion), discount houses US$5 million ($500 billion) and asset managers US$1 million ($100 billion) as minimum capital.
To date Kingdom Financial Holdings (KFHL) and ABC have announced plans to merge units ahead of the deadline. Besides merging some of its units, other "small banks" did not pay out dividend to shareholders citing the need to conserve resources ahead of the deadline.
Despite posting an after tax profit of $562 billion, FBC said it was not paying out dividends "in order to ensure that our businesses continue to be capitalised well in excess of the existing and new minimum regulatory requirements".
The "big boys" in the industry are losing no sleep after breaching the psychological trillion-dollar mark in after tax profits.
CBZ underlined its status as the biggest of the locally-owned banks after posting an after tax profit of $1.490 trillion.
But group CEO Nyasha Makuvise refused to accept the big boy status saying: "CBZ is just a small bank".
Makuvise however said the group "has a dormant property, which will be a giant when it wakes up".
CBZ said notwithstanding the need to achieve the minimum capital requirements, "it was important that shareholders receive some return on their investments". A dividend of $340 per share was declared.
Stanbic were within reach and at $1.409 trillion after tax profit, MD Pindie Nyandoro and her team refused to be intimidated.
Blue ribbon bank Standard Chartered Zimbabwe had an after tax profit of $1.28 trillion But its assets valued at $14.78 trillion as at December 2005 remained the highest in the sector.
Charity Jinya-led Barclays hold its own after posting an after tax profit of $1.175 trillion. Barclays declared a final dividend of $147.50 per share of which 80% ($118) will be scrip while 20% ($29.50) in cash.
How banks have fared so far
CBZ Bank Ltd
Profit after tax: $1.490 trillion
Dividend: CBZ Holdings declared a dividend of $340.
Stanbic
Profit after tax: $1.409 trillion
Standard Chartered
Profit after tax: $1.28 trillion
Barclays Bank
Profit after tax: $1.175 trillion
Dividend: Final dividend of $147.50 per share of which 80% ($118) will be scrip while 20% ($29.50) will be cash
FBC Holdings
Profit after tax: $562 billion
Dividend: It said it was not giving out dividend "in order to ensure that our businesses continue to be capitalised well in excess of the existing and new minimum regulatory requirements".
African Banking Corporation of Zimbabwe Ltd
Profit after tax: $220.6 billion
Dividend: The ABC group said that in order to adhere to the new capital requirements set by the Reserve Bank the group has taken a decision not to pay out any dividend.
Kingdom Financial Holdings
Profit after tax $199 billion
Dividend: Elected not to declare dividend "in light of the need to conserve and build up the capital base.
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