Business
Zimbabwe banks lose popular support
A Zimbabwe banking survey has revealed that locals prefer doing business with foreign owned financial houses as they are perceived to be safe and reliable compared to local banks. This is despite a pall of uncertainty looming over foreign banks, as they are still to comply with Zimbabwe’s indigenization laws, which stipulate that foreign companies must cede at least 51 percent of their shareholding to locals or risk closure.
Policy inconsistency has been the hallmark of Zimbabwe’s indigenization laws, as officials give conflicting statements on the government’s position to banks. The southern African country has a large concentration of indigenous banks but foreign-owned institutions rank highly in terms of market share.
According to Bankers Association of Zimbabwe (BAZ), there are 21 banks operating in the country, 16 local and five foreign-owned. The foreign banks include Barclays, Standard Chartered, Stanbic, AfrAsia and MBCA. The survey conducted by Industrial Psychology Consultants (IPC), said Standard Chartered Bank was the most customer-friendly financial institution.
The consultancy said, “Findings reveal that more customers want to move to other banks today than they did in 2012. Eight in every 10 bank customers said they want to move away from their current bank.” Furthermore, the consultancy added, “Only 24 percent of the bank customers said they would want to stay with their current banks. Interestingly most of the customers prefer moving to international banks.”
Other highly ranked banks in customer relationship management were National Merchant Bank, First Banking Corporation, MBCA and CBZ. The survey revealed that that customers viewed polite and courteous staff, prompt service and accessibility in terms of branches, access to their funds and managers as key in maintaining the relationships.
The survey stated, “The results of this research show that customers are agitated by poor communication or lack thereof by their banks. … Banks need to understand engagement drivers of their customers and move from the traditional customer engagement strategies and come up with unique strategies not yet used by their counterparts to segment themselves from competition.”
A number of locally owned banks have in the past few years closed shop or were put under curatorship by the central bank, developments, which analysts say, dampened customer confidence in indigenous banks. Of late foreign investors ranging from Russians to a Mauritian-based consortium headed by a former Wall Street banker have been taking over controlling stakes at most local banks.
Recent banks financial reports indicated that growth has stagnated, creating a funding predicament in an economy desperately in need of cash. While the Reserve Bank of Zimbabwe (RBZ) says the banking sector is safe and sound, financial statements showed that the situation was volatile. Most banks said a moratorium on interest rate hikes, imposed by the RBZ through a memorandum of understanding with the banking sector early last year but later suspended, had weighed down financial institutions, forcing revenues to shrink.
