FBCH to focus on liquidity and risk management

Published: 20 March 2014

FBC Holdings will continue focusing on liquidity and risk management under an environment characterised by liquidity challenges and heightened default rates currently obtaining in the Zimbabwean economic landscape, CE John Mushayavanhu told analysts yesterday.

"The group will maintain its strong risk management culture reinforced by a risk philosophy which states that everyone in the group is a risk manager," he said.

He added that they will continue to enhance their credit risk management framework whilst concurrently ensuring that impairment allowance is properly measured and charged.

"Asset quality; 91% of our book is graded 1-7 which is considered good and 9% thereabout which is the NPLs…is the impaired book. But even when you look at that impaired book it is secured as I have always said. Secured and predominantly from third parties security.

"Going forward for the banking operations, it's all about liquidity management. I think throughout the liquidity crisis we never heard anyone saying they went to FBC and failed to get their money. Our ATMs were full of cash and we were cashing other bank's customers who have got ZimSwitch cards on our ATMs and that is the emphasis going forward," said Mushayavanhu.

Commenting on the MoU he said; "We also had the memorandum of understanding being cancelled but it's quite worrying because, on one hand the written MoU was cancelled in November last year. Currently we've what I call an unwritten MoU because what the Reserve Bank is saying to us is if you want to increase your bank charges you need to write and seek permission from the Reserve Bank. It reminds me of the good old days of NIPC…and it's quite worrying that we now have kind of price controls in the banking sector."

He added that one would have thought that market forces would be allowed to prevail and if the bank is more expensive than the other, the customers would go to the bank which is cheaper.
- zfn

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