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Harare - Companies in Zimbabwe are reducing borrowings to fund offshore payments, Barclays Zimbabwe managing director, George Guvamatanga, said last week, adding that the bank was still keen to take up government securities, despite market scepticism over treasury bills.

Barclays Zimbabwe is still controlled by Barclays plc, but the British bank has said that it intends to dispose of its interests in the bank.

A Malawian bank has said in the past few weeks that it is in negotiations with Barclays plc to acquire the Zimbabwean unit.

Banks in Zimbabwe are required to have capitalisation of $100million by 2020 and Barclays Zimbabwe has taken a strategy to shore up its capital base to the required level. However, this has come at a cost for shareholders as the bank has not declared a dividend.

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“We have had considerations for the need for the bank to meet regulatory requirements such as minimum capital by 2020. It was considered much more appropriate to meet the capital requirement through capital retention,” said Sam Matsekete, chief finance officer for Barclays Zimbabwe.

Barclays says it has witnessed a slow-down in borrowings by financially stretched companies that have accumulated backlogs of international payments.

The Reserve Bank of Zimbabwe says the backlog in companies’ international payments has improved to $185million.

Guvamatanga told shareholders at an annual general meeting of the company in Harare last week that the headwinds still persist for the economy and for the banking sector.

“The capacity of the private sector to borrow is becoming constrained and there is pressure on disposable incomes.

"We still have pressure on Nostro accounts (international accounts that local banks keep to process clients’ offshore transactions and receipts) to fund payments, but the serious question should be whether the pressure on Nostro accounts is real or not,” Guvamatanga said.

Shareholders in the company have voted to approve non-executive directors’ fees of $200000 and about $804000 in fees and bonuses for executive directors.

This was despite earlier concerns raised by some shareholders over the growth in the directors’ fees compared to the bank’s failure to pay a dividend.

Guvamatanga added that although there had been scepticism over treasury bills that the government is issuing to settle debts owed to companies among others considerations, Barclays Bank Zimbabwe still had appetite for government paper.

The companies for which treasury bills have been issued include Meikles, as well as the Zimbabwe unit of Impala Platinum, Zimplats among others.