245 Allied Bank workers lose jobs

HARARE - Two hundred and forty-five workers are set to lose their jobs upon liquidation of Transport minister Obert Mpofu’s collapsed Allied Bank.

This comes as nearly 1 000 banking sector employees were pushed onto the streets in 2014 as some financial institutions rationalised operations while others went under — in the wake of waning economic activity.

While Allied Bank’s chief executive Florence Gowora said the 245 “remain employees of the Bank until its liquidation”, the workers’ fate seems already sealed.

She, however, could not give detail on the liquidation process, referring questions to the Reserve Bank of Zimbabwe (RBZ).

Early this year, the troubled Allied Bank voluntarily surrendered its banking licence to the RBZ after failed recapitalisation efforts.

Upon ceding the licence, the bank’s employees were barred from accessing any of its premises.

Allied Bank is one of the six banks that failed to meet the central bank’s $25 million minimum capitalisation whose deadline lapsed end of June last year.

As at September 30, 2014, the financial institution’s capital stood at $3 million.

The central bank said the financial institution’s licence was revoked “in terms of section 14 (4) of the Banking Act (Chapter 24:20)”.

“The RBZ has determined that the banking institution is no longer in a safe and sound condition in that the institution is grossly undercapitalised and is facing chronic liquidity challenges,” it said, adding that Allied Bank will be liquidated in terms of section 57(1) (a) of the Banking Act.

The bank’s move to voluntarily cede the licence comes on the back of a flopped deal with a Mauritius-based consortium — led by Terence Mukupe — that was targeted at injecting around $30 million fresh capital into the financial institution and a long engagement with the RBZ to pursue recapitalisation options.

Industry experts say Allied Bank’s closure gives credence to the view that most indigenous banks are vulnerable to the mounting economic pressures and are also less prudent and stringent in their risk assessments on lending compared to foreign-owned banks.

Zimbabwe’s banking sector is saddled by around $700 million bad loans, the bulk of which are on local bank’s books.

Notwithstanding repeated statements by Finance minister Patrick Chinamasa and the central bank that the Zimbabwean banking industry is safe, there have been signs of strife among the locally-owned banks.

Some of them have been unable to meet daily demand for cash from depositors, prompting calls for mergers and amalgamations to help the local finance institutions shore up their capital bases and capacity.

In the past two years, local banks such as Interfin and Genesis have collapsed, with hundreds losing jobs.

Comments (6)

Ndiyo Zimasset yacho here iyi.

jackovick - 16 January 2015

Ndiyo Zimasset yacho here iyi.

jackovick - 16 January 2015

KKKKKK ZimAsset, where is the money he looted in Mines,he is now withholding it for fear of the instability in his party Zanupf

kudzi - 18 January 2015

I want job in bank

muhammad akbar - 7 February 2015

I want bank job

muhammad akbar - 2 March 2015

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