Commercial banks in Zimbabwe are expected to report modest profits for 2013 due to political uncertainty caused by the July presidential elections and the effect of a memorandum signed with the country's central bank that put a cap on interest rates and fees, according to analysts quoted by AllAfrica.
According to the Harare-based economist John Robertson, the better capitalised and more prudent foreign banks will report good profits, but the local ones are expected to post losses. Banks suffered from deposit withdrawals after President Robert Mugabe's election victory amid fears of an immediate return of the Zimbabwean dollar.
Econometer Global Capital head of research Takunda Mugaga said the memorandum of understanding, signed in January 2013 between the central bank and local financial institutions to put a ceiling on bank charges and fees last year also affected their profits. According to the memorandum, the lending rates cannot exceed 12.5%, while cash withdrawal fees were set at a maximum of 5% of the withdrawal. Later last year, the memorandum was abandoned.