Deposit Insurance Payments reaches $3.2 mln as at December 2017: MPS
By Insurance24
HARARE, Deposit Insurance Payments for failed contributory banks stood at $3.2 mln as at December 2017, which represents 50% of the total exposure of $6.4 mln.
According to the Monetary Policy Statement by the Reserve Bank Governor John Mangudya, a total 11,744 out of 54,909 depositors by n umber had been compensated out of the Deposit Protection Fund in respect of the failed contributory institutions under liquidation.
Currently, compensation is being made for six failed banks with gross deposits of $185.69 mln while total depositors are 54,909.
The banks are Royal Bank, Trust Bank, Genesis, Allied Bank, Interfin Bank and AfrAsia Bank. The MPS said that the deadline for Genesis depositors to receive compensation from the deposit protection fund lapsed on 30 June 2017 in terms of section 38(5b) of the Deposit Protection Corporation Act (Chapter 24:29).
“Payments in respect of liquidation will, however remain in force in accordance with the framework and parameters as provided in the Companies Act (Chapter 24:03) as read together with the Insolvency Act (Chapter 6:04).
Meanwhile, during 2017, a total 18 out of 19 operating banking institutions recording profits with the sector recording a 33.62% increase in net profit to $241.94 mln last year compared to $181.06 mln in 2016.
Deposits grew from $6.51 billion in December 2016 to $8.48 billion by December last year and the Governor said the notable increase was partly attributable to increased export receipts, expansionary impact of government expenditure and multiplier effect of new deposits.
The loans to deposit ratio however climbed down from 56.64 percent in 2016 to 44.81 percent last year, breaching the 70 percent benchmark, reflecting banks’ decreased lending appetite. Non-performing loans (NPLs) ratio stood at 7.08% compared to 7.87% in 2016. The ratio is still above the central bank’s benchmark of 5%.
As at 31 December 2017, the Zimbabwe Asset Management Company (Zamco) had acquired NPLs amounting to $987 million and these acquisitions are said to have assisted banks to clean up their balance sheets so that they are better able to support the economy through provision of credit.
According to the Governor, ZAMCO has now embarked on the resolution and recovery phase of its operating cycle.
