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Cabs to close 4 branches

by Staff reporter
04 Dec 2019 at 09:22hrs | Views
OLD Mutual subsidiary, Cabs is shutting down four branches by end of January next year as the financial institution streamlines its business model in response to the tough operating environment.

The bank is set to close Highfield, Highglen, Letombo and Norton branches.

This came after the bank in August announced the closure of four other branches by year end.

Cabs managing director Simon Hammond confirmed the branch closures.

"We notified our customers last Friday (29 November 2019) of our intention to close four branches on January 31, 2020. We are putting alternative arrangements in place to service our customers and will continue to review the situation," Hammond said.

Insiders say some branches had become redundant due to the adoption of technology as depositors have increasingly embraced digital transactions.

The cash crisis compounded the situation as more and more people resort to get cash from the streets, albeit at a premium as it has become elusive in banks.

In the process, banks also cut on rentals, especially in situations where they were renting the banking halls.

Zimbabwe Banks and Allied Workers Union acting secretary-general Shepherd Ngandu said Cabs could close more branches next year, spelling doom for the financial services sector.

"Our investigations revealed that indeed the bank is intending to close multiple branches over a period of time running into 2020 and even beyond. The project is said to be implemented in phases and the recent closure of four branches just witnessed is another such phase which will be followed by other closures," Ngandu said.

While the closure of branches could not lead to immediate job cuts, Ngandu said the future of the financial services sector employees hangs in the balance.

"Naturally this paints a gloomy outlook for workers who risk losing jobs through retrenchments. This is exacerbated by the fact that generally the financial services sector is shrinking, owing to technological revolution which is replacing human labour," he said.

Banks have been limiting their lending in order to tame non-performing loans and had been getting revenue from electronic transactions.

In order to support risks associated with their business activities after the adoption of the local currency, the central bank in September said tier one banking institutions were required to hold core capital of at least $200 million by December 2020.

Previously it was pegged at $100 million.

After raising the bank's rate for overnight borrowing from 50% to 70%, taking into account developments on inflation and the exchange rate in September, the central bank last month reviewed the rate down to 35%.

Source - newsday