…CABS shut down branches
CABS, a subsidiary of Old Mutual Zimbabwe, is closing four of its branches across the country next month as the financial institutions reduces its brick and mortar model against the backdrop of breakneck changes in technology and a harsh economic environment.
Branches to be shut down are those in Chegutu, Mt Darwin, Chivhu and Mpandawana in Gutu.
This comes after the financial services provider last year closed several branches in Harare and Norton in response to tough operating environment and also as a result the technological revolution which is replacing human labour.
This also means that several workers now risk losing their jobs through retrenchments.
“CABS would like to advise customers that in line with our branch rationalisation strategy, the following branches will be closing on March 31, 2020. Services will be available at the nearest agents and CABS branches nationwide,” CABS said in a notice to customers yesterday.
CABS said services will be available at registered agents. Last year in October, Old Mutual Zimbabwe embarked on a retrenchment exercise as the group reeled under the worsening economic environment.
Then chief executive officer, Jonas Mushosho, who has since left the group, said the exercise was meant to cut costs in difficult operating environment.
The latest development at Old Mutual Zimbabwe comes at a time when other companies across all industries are scaling down operations or closing down due to economic meltdown, throwing workers onto the streets.
“The economic challenges facing our country and the business have not relented,” Mushosho said then. “Given the high inflation rate and the need to control total operating costs, it is important for the business to reduce costs.” Mushosho added: “Management is therefore tabling an offer for a voluntary staff retrenchment scheme on an improved package.
Management will endeavour to conclude this round of retrenchments timeously in order to preserve the value of the package.”
The scale at which physical bank structures are disappearing is increasing due to increasing adoption of technology as depositors have embraced digital transactions. The cash crisis compounded the situation as more and more people now resort to getting 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. Indications across the banking sector have shown that several banks are rolling out aggressive investments towards upgrading their digital platforms as well as enhancing their Information Communication Technologies to process more transactions and launch more customer-centric products.
CABS’s asset base increased by 45.8% to ZWL$2.1bn in the half year to June 2019. Full year financial results to December 31, 2019 are yet to be published.
The bank recorded a 183% jump in after-tax profit to ZWL$60m from ZWL$20m recorded in comparative period the previous year, largely driven by higher interest as well as increased fees and commission earnings. Operating expenses had increased by 66% in the half year under review, but were mitigated through inflation-adjusted rates