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RBZ 2005 Annual Repo

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RBZ 2005 Annual Repo CONTENTS GOVERNOR’S FOREWORD ........................................................................................................................................................................................ 3 DEPUTY GOVERNOR’S REMARKS .............................................................................................................................................................................. 5 SENIOR DIVISION CHIEF’S PREVIEW ........................................................................................................................................................................ 7 CHAPTER 1 .................................................................................................................................................................................................................. 9 ENHANCED SUPERVISORY PRACTICES...................................................................................................................................................................... 9 1.1 Licensing Process........................................................................................................................................................................................9 1.2 Risk-Based Supervision ..............................................................................................................................................................................9 1.3 Consolidated Supervision ........................................................................................................................................................................15 1.4 External Credit Ratings ............................................................................................................................................................................15 CHAPTER 2 ................................................................................................................................................................................................................18 CONDITION AND PERFORMANCE OF THE BANKING SECTOR ..........................................................................................................................18 2.1 Overview..................................................................................................................................................................................................18 2.2 Balance Sheet Structure ............................................................................................................................................................................19 2.3 Performance of Banking Sector ................................................................................................................................................................20 2.4 Sectoral Analysis ......................................................................................................................................................................................23 2.5 Asset Management Companies Sector ......................................................................................................................................................30 CHAPTER 3 ................................................................................................................................................................................................................32 MAJOR DEVELOPMENTS AND ACTIVITIES IN BANKING SUPERVISION..............................................................................................................32 3.1 Introduction ............................................................................................................................................................................................32 3.2 Regulatory Developments ........................................................................................................................................................................32 3.3 Review of Minimum Capital Requirements..............................................................................................................................................32 3.4 Licensing Activities for Banking and Non-Bank Financial Institutions ....................................................................................................33 3.5 Ongoing Supervision of Banking Institutions and Asset Management Companies ....................................................................................34 3.6 Major On-Site Examination Findings ......................................................................................................................................................35 3.7 Supervisory Actions ..................................................................................................................................................................................37 3.8 Compliance and Corporate Governance ..................................................................................................................................................38 3.9 Risk Management in the Financial Sector ................................................................................................................................................38 3.10 Microfinance National Task Force............................................................................................................................................................39 3.11 Supervision of Other Non Banking Financial Institutions ........................................................................................................................40 3.12 Strengthening Supervisory Capacity ........................................................................................................................................................42 CHAPTER 4 ................................................................................................................................................................................................................43 TROUBLED BANK RESOLUTION................................................................................................................................................................................43 4.1 Introduction ............................................................................................................................................................................................43 4.2 Market Solutions......................................................................................................................................................................................43 4.3 Appeals to The Reserve Bank ..................................................................................................................................................................45 4.4 Troubled Bank Fund ................................................................................................................................................................................46 APPENDIX 1 - Balance Sheets of Banks ........................................................................................................................................................................47 APPENDIX 2 - Income Statements of Banks ..................................................................................................................................................................53 APPENDIX 3 - Income Statements and Balance Sheets of Asset Management companies ..............................................................................................59 APPENDIX 4 - Credit Ratings of Financial Institutions ..................................................................................................................................................62 APPENDIX 5 - Registered and Operating Banking Institutions ....................................................................................................................................63 APPENDIX 6 - Banking Institutions Under Curatorship .............................................................................................................................................. 69 APPENDIX 7 - Registered and Operating Asset Management Companies as at 31 December 2005 ..............................................................................70 APPENDIX 8 - Asset Management Companies closed in 2005 ......................................................................................................................................72 BANK LICENSING, SUPERVISION & SURVEILLANCE DIVISIONAL STRUCTURE ................................................................................................73 PROFILE OF BANK LICENSING, SUPERVISION & SURVEILLANCE (BLSS) ............................................................................................................74 BANK LICENSING, SUPERVISION & SURVEILLANCE ANNUAL REPORT 2005 1 PURPOSE OF THIS REPORT The purpose of this Annual Report is to provide an analysis of the condition and performance of the banking sector in Zimbabwe for the year ended 31 December 2005. The report also provides an overview of the supervisory operations and activities during the period under review. Readers should note that this report is not a statutory requirement, and that it has been prepared solely for information purposes for the benefit of the Bank’s various stakeholders.
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