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Former Kingdom Bank in Bulawayo

Charity Ruzvidzo Business Reporter
Kingdom Bank founder Nigel Chanakira says the collapse of AfrAsia Bank — an institution he moulded to iconic status — is a sad development in the history of the financial service institutions in Zimbabwe.

Kingdom was established in the 1990s and grew to become one of the biggest indigenous banks before taking an unfortunate nosedive a few years ago.

It was rebranded to AfrAsia Zimbabwe Holdings in 2013 after Mauritian owned AfrAsia Bank Limited bought out Chanakira.

In the face of capitalisation constraints the bank has been struggling to serve its clients, running hide and seek with depositors who had to endure days on queues without getting their cash.

On Tuesday, the Reserve Bank of Zimbabwe (RBZ) cancelled the ailing institution’s licence after determining that the bank was no longer in a stable condition.

“The closure of AfrAsia Bank is very sad. I’m deeply disappointed by the whole event. As you’re aware I sold my shares in September 2013. Since then I was no longer part of the operations at the bank,” said a remorseful Chanakira.

He said the collapse of the banking institution, alongside other ailing banks such as Allied Bank that shut down recently, would have a negative effect on the financial services in the country.

Chanakira said he received the “unfortunate news of AfrAsia collapse” with disappointment.

“When I heard the unfortunate news I was not happy,” he said. “Such unfortunate events come along with a lot of losses. Clients will lose their money, workers also lose their jobs. The confidence that depositors had in our local banking system is destroyed by such occurrences”.

Yesterday workers from the banking institutions who spoke on condition of anonymity said they were told to go home while their offices had been shut with notices saying “closed”.

“I’m at home as we speak because I’m jobless and there’s no one in the office because everyone has been relieved of their duties,” said one of the workers.

Kingdom Bank Zimbabwe Limited was established in 1997 by Chanakira, before it became AfrAsia Bank Zimbabwe Limited.

In 2012, AfrAsia Bank Limited, a financial services provider based in Mauritius, invested $9,5 million into the bank’s holding company thereby acquiring 35 percent ownership in the Zimbabwean financial group.

Until September 2013, the bank was a subsidiary of Kingdom Financial Holdings Limited (KFHL), a publicly traded company on the Zimbabwe Stock Exchange.

Chanakira left the bank in 2013 when he sold his entire stake and due to changes in ownership, KFHL rebranded to AfrAsia Zimbabwe Holdings Limited (AZHL), a name it upheld to date.

The 35,7 percent shareholding that the holding company previously held in Kingdom Africa Bank Limited, an investment bank in Botswana, was also disposed of in September 2013.

Last year, AfrAsia Holdings sought investors in a bid to resuscitate the struggling bank but there was no breakthrough as the bank’s woes continued to mount, with depositors struggling to withdraw their cash.

The challenges forced the bank to close five of its branches in Belmont, Ruwa, Chitungwiza, Victoria Falls and Newlands.

AfrAsia Bank is one of the four banking institutions that the central bank has said are “ill”, including Allied and Capital banks, whose licences were revoked and Tetrad, which was suspended from undertaking banking activities.