CABS to go commercial?

previously dominated by local banking giants CBZ Bank and the international ones — Standard Chartered, Barclays and Stanbic Bank.

Although managing director Mr Kevin Terry has repeatedly denied that the building society will soon become a commercial outfit, staff on the ground have confirmed the impending changeover.

“We have not yet gone into commercial banking as we are still working on a few technical issues,” said an official from CABS head office in Harare.

Another employee said the bank was supposed to have started operating as a commercial bank yesterday but they had failed because there was some work still to be done on the system upgrade and training of staff.

“We will start operating as a commercial bank as soon as the system has been properly upgraded and the training of staff has been completed,” she said.
She added that training started months ago.

CABS is currently the largest building society and most of its operations already have been similar to those of a commercial bank.

The move by CABS could strategically place the institution to take advantage of developments likely to unfold in the banking sector if the international banks are forced to dispose 51 percent shareholding to locals under the country’s indigenisation law.

After the change-over, CABS is likely to comply without strain, with the stringent capital requirements stipulated by the Reserve Bank of Zimbabwe.

Traditionally, building societies have stuck to operations slightly different from those of commercial banks and concentrated on mobilising savings.

However, recent developments in the financial services sector have seen most building societies merging with their parent banking insititions as was the case with FBC Building Society and CBZ Building Society.

CABS’ move to transform into a commercial bank is set to fit in with the recently introduced scheme to extend loans to youths through the empowerment fund run in association with the Ministry of Youth Development, Indigenisation and Empowerment.

In terms of compliance with the country’s indigenisation regulations, CABS will ride on its parent company Old Mutual whose plan has since been accepted by the ministry.

Its impact on the commercial banking lanscape is also set to be significant considering its vast countrywide network.