MBCA expands Zim footprint

HARARE - MBCA Bank (MBCA) – a unit of South Africa’s Nedbank group – says it will increase its branch network in Zimbabwe despite indigenisation pressures threatening to scuttle operations.

The financial institution said the move is part of efforts to harness segments that were not traditionally on their target market.

MBCA is one of the four foreign-owned banks under pressure to comply with Zimbabwe’s empowerment law. The other three are Barclays, Standard Chartered and Standard Bank owned Stanbic.

The indigenisation policy compels all foreign-owned firms to cede at least 51 percent shareholding to locals.
 
Dedrey Mutimutema, MBCA’s spokeperson, said the group had changed their strategy and were poised to provide services that are tailored to meet all clients’ diverse needs.

“This means that the bank will expand service delivery channels to cater for clients` varied needs. The delivery channels will include, extending our branch foot print, advancing our electronic platforms as well as the introduction of mobile banking services,” said Mutimutema without disclosing how much the group was investing into the initiative.

Sources close to the developments say the bank is aiming to establish branches in Harare and three more outside the capital.

MBCA currently has six branches.

This comes as MBCA has maintained confidence on Zimbabwe, despite being confronted by widespread growth inhibiting factors, chief among them the political and economic uncertainty challenges coupled with liquidity problems and shrinking depositor base.

Renewed calls by Indigenisation minister Saviour Kasukuwere for foreign-owned banks to comply with the laws also exacerbate their plight.

Recently, Kasukuwere said banks will be indigenised by July.

MBCA chairman Willard Zireva expressed optimism of an improved economic environment in the post-election period.

“The bank maintains a positive view of the future and thus positions itself to take advantage of opportunities that may be presented by the political and economic developments after the elections,” he said.

The bank posted a solid set of financial results for year to December 2012, as profit after-tax increased 48 percent to $4, 96 million up from $3, 36 million over the same period the previous year.

The performance was attributed to improved net interest income which surged by 37 percent to $10,8 million from $7,9 million achieved in prior comparable period while costs were also contained with the bank’s cost-to-income ratio down to 68 percent from 79 percent in 2011.

Zireva said the bank was strategically positioning itself to be the country’s leading financial institution through striving to deliver exceptional customer service through investing in mobile and electronic banking.

Positive results in divisional performance of the bank also spurred the positive results for the bank.

“The corporate banking division contributed 45 percent of total operating income for the Bank compared to 48 percent recorded the previous. The division’s performance continued to be biased towards agriculture and mining sectors with inroads having been made to provide services to new players in these areas,” said Zireva.

Zireva also also highlighted the positive impact made by international capital advanced to the bank.

“The retail banking division contributed 39 percent towards total revenue of the bank for the bank compared to the previous year figure of 34 percent”,he said.

MBCA says consultations are still on-going on the indigenisation process, revealing that the parties are yet to reach an acceptable solution agreeable to stakeholders. - Kudzai Chawafambira

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