Commercial bank deposits surge 25% to $8bn

Commercial banks deposits rose by 25% to $8 billion in the first 10 months of last year, data from the central bank has shown.


According to the Reserve Bank of Zimbabwe (RBZ)’s monthly review of October 2018, the services sector constituted the bulk of deposits at $2 billion, followed by financial organisations, which had $1,1 billion in deposits.

The distribution sector had $984,7 million, manufacturing ($846,6 million), individual ($817,3 million), financial and investment ($469,8 million), agriculture ($445,4 million), mining ($315,8 million ), transport ($260,8 million), communications ($391,9 million) and conglomerates ($67,9 million).

Commercial bank loans and advances in the 10 months to October were $2,5 billion, down from the $2,7 billion recorded over the same period last year, indicating a reduction in lending appetite by banks, apparently to cushion themselves from non-performing loans (NPLs).

Individual loans led the pack with, a quantum of $680,4 million, followed by the agriculture sector at $453 million.

Services got $313,3 million, distribution $389,8 million, manufacturing $218,9 million, mining $11,9 million and financial organisations $165,2 million.

The communication sector took up $16 million in loans, while financial and investments received $15 million. Transport and conglomerates received $26,1 million and $12,8 million respectively.

As at June last year, the industry reported NPL at 6,22% compared to 7,08% in 2017.

In 2015, the central bank formed a special purpose vehicle Zimbabwe Asset Management Company (Zamco), which bought up $1 billion in bad loans.

Zamco has since discontinued buying bad loans and banks are now required to improve asset quality through enhancing the banks’ credit risk management systems and use of the credit registry.

The credit registry became operational in 2017.


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