Zimbabwe Stock Exchange listed financial institution CBZ Holdings is set to increase its correspondent banking relationships following fruitful discussions held with several Chinese institutions.
At present, CBZ Bank mostly uses the Bank of China for its offshore transactions. This comes as not only CBZ, but the whole banking industry has over the past years lost 102 correspondent banking relationships due to higher country risk.
CBZ Holdings executive director treasury Mike Mudondo said the country’s biggest financial institution was part of the business delegation led by President Emmerson Mnangagwa to China recently.
“We went to China to solicit and deepen relationships with correspondent banks there considering the previous scenario where the country had lost a lot of relationships with international financial institutions.
“We took this opportunity to develop new relationships and we managed to sign a lot of non-disclosure agreements. The non-disclosure agreements were signed with big institutions with balance sheets of not less than $4 billion,” said Mudondo.
Zimbabwean president Emmerson Mnangagwa has since his inauguration speech in November 2017, emphasised the need to re-engage with the international community in order to access funding.
Analysts are of the opinion that there is need for the normalisation of relations (which) will also extend to embrace strengthening of cooperation with the international financial community, central of which is the arrear clearance process with the World Bank, and the African Development Bank.
Another financial institution, ZB Financial Holdings last year re-opened relationships with foreign correspondent banks in Europe and other financial institutions across the world, following the removal of the bank from United States sanctions list.
The United States Department of the Treasury’s Office of Foreign Assets Control (Ofac) removed ZB Holdings and its banking subsidiaries from the list of specially designated nationals in October last year.
The banking group had been on the OFAC list since 2008.
Following the sanction de-listing, the financial institution has been able to resuscitate its euro, British pound, South African rand and US dollar correspondent banking accounts.
Mudondo said the CBZ Holdings also managed to have discussions with Chinese companies interested in investing towards the agriculture and manufacturing sectors.