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Zimbabwe: FBC Crowned Best Bank

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FBC Bank Limited was yesterday honoured as the overall winner of the prestigious 2020 Zimbabwe Independent Banks and Banking Survey awards in a virtual ceremony held to honour the resilient spirit of the Zimbabwean banks.

FBC defied odds, improving its income base by leveraging on various strategies.

In 2019, a significant portion of the bank’s income was generated from the non-funded line, which typically includes fees and commissions, foreign currency dealings and fair value adjustments.

FBC’s income derived from foreign currency dealing was the highest for the sector and this performance has been sustained into 2020.

Stanbic Bank Zimbabwe was voted runner-up, after reporting the highest income during the half year ended June 30, 2020.

The banks’ high net worth and largely corporate clients involved in exporting have given it a capacity to withstand a volatile climate.

Lead adjudicator and Equity Axis MD Respect Gwenzi said winners in this category showed a quicker growth in overall income and strengthened liquidity and overall balance sheet position.

“In our adjudication process, we sought to review and award outperforming banks based on their financial performance over the six months period to June 2020,” he said.

“The key categories included the overall winner and runner up, which was determined based on income performance, balance sheet performance and key performance ratios. These banks hardened their balance sheet to counter inflation, at a rate that was above sector averages. The banks also kept alive traditional such as funded income, despite the risks of inflation, low interest rates and heightened repayment risk. In the category on innovation, banks were rated based on the products released and processes adjustment through digitisation.”

Speaking at the event, held under the theme “Reimagining Banking: Beyond Survival”, African Development Bank (AfDB) country economist Walter Adero pointed out despite the macro-economic challenges of banks and the fact that most of the banks are small, particularly the domestic banks, they have remained afloat.

However he stressed that there was need for more reforms should the financial system recover its asset base which has been eroded.

“We know that the forex situation over the years has not been great, but the government through the Reserve Bank of Zimbabwe has constituted the forex auction system in June this year.

We believe the auction system is just a starting point and we will see improvement. We need to develop the financial system through developing the system. We know that the asset base has been eroded given the challenging forex situation but we believe if stability is restored in the forex system the asset base will recover,” he said. “This is because unlike in other countries where the economy relies mostly on the local currency, in Zimbabwe we know that the banking system has for many years relied on forex especially the US dollar. From, last year, a transition started and it is continuing. It will take some time before the banking system is domiciled in the local currency.”

Adero added that reforms would ensure that the sector achieves stability as a requirement for financial intermediation.

CBZ Bank Limited was the overall winner of the Innovations and Channels Award, while BancABC Zimbabwe was the runner up.

BancABC Zimbabwe also scooped the Markets Visibility and Positioning Award, while Nedbank won the Sustainability award. CABS got the best performing Building Society award.

Odero urged the Zimbabweans banks to embrace new products, digitisation and global value chains that would make the country’s financial system vibrant and profitable.