It said retail banking would face even more problems as mobile money is projected to record “phenomenal growth” in Zimbabwe, underpinned by a financial inclusion strategy announced by the Reserve Bank of Zimbabwe in March.
“Coupled with pressure from central bank to lower bank charges, we forecast retail services revenue for banks to remain suppressed, hence forcing banks to rely more on interest income, which forms part of core banking. This on its own is a flag to transactional retail services fee income to banks going forward,” added Invictus.
It said the real time gross settlement system still dominated in terms of transactional values, but mobile payments accounted for 87.9 percent of transactional volumes.
Growth in mobile transactions translated to $427 million, equivalent to 7.5 percent of total monetary transactions.
It said going forward, and with the multicurrency regimen force, banks’ earnings would be driven by cost containment to enhance efficiency, as well as loan portfolio management.
“Embracing technology and participation in financial inclusion will also boost income and make banks competitive in the face of accelerated informalisation of the economy, increased mobile penetration rates and popularity of mobile money services,” said the report.
“In the short term, Treasury Bills Trading income and ZAMCO (Zimbabwe Asset Management Corporation) operations will likely drive income but we remain skeptical about the sustainability of these, and hence put doubt on banks that have income components largely driven by these components,” the report added.-The Source
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