Harare:As Finance Minister Tendai Biti revealed in London this week that indigenisation is elitist transfer” of wealth which will not create any “new value”, an  indigenous bank, Capital (also known as Renaissance Merchant Bank) has experienced a massive looting spree that has seen the company awarding hefty financial packages to its senior bosses while yet simultaneously failing to meet its own customer obligations.
ZimEye can exclusively reveal that Capital Bank which was saved from curatorship barely a few months ago has embarked on a swindling splurge that stands to threaten the welfare of its vulnerable customers.  This series of exclusive articles comes after a winding three week investigation  into the activities of Capital Bank which have triggered many customers to consider taking legal action against the bank as revealed in the below report submitted to ZimEye.
The bank’s Managing Director, Mr Lawrence Tamawyi, has avoided responding to these reports claiming emails and telephone call messages never reached him for a whole three week period. But ZimEye can reveal that his secretary who spoke to this publication was forwarded emails which she confirmed receiving. Phone calls to Tamayi were also at other times abruptly cut before the MD had answered.” (Watch this space for Tamayi’s response.)
In an unprecedented move that smacks of systematic looting, Capital Bank Corporation Limited (formerly ReNaissance Merchant Bank), which just escaped curatorship in March 2012, awarded astronomical salary increases to its management under the guise of ‘total cost’. Total cost is when a company grosses up all its perks offered to an employee and pays this out in the form of a single salary. Though noble if properly  implemented, what has raised a stink and suspicion that this could be looting are the hefty salaries, with rates as high as 1,000%.
Also, skeptics are questioning discrepancies observed even within the managers’ salaries. If this had been prudent, a normal distribution would have been observed in the bank’s salary structure. However, the lowest graded manager (Assistant Manager), now takes home US$2,200, (up from an average of $800.00); followed by Relationship Managers and Dealers, who take home an average of US$3,800, up from $1,000. The next level of management, according to the bank’s grading system are the Heads of Departments, who now pocket a whopping $7,300 per month, a rise from $1,200. This loop includes several managers namely the Regional Managers, Risk Manager, Human Resources Manager, I.T. Manager, Audit Manager, Trade Finance Manager and all other Departmental Managers.
Executive Directors now take home incredible salaries of an average of $8,500.00. The bank’s Managing Director, Lawrence Tamayi, takes home an unbelievable $23,000 per month. This is not bound to go down well with the Capital Bank’s depositors, who are still to be fully paid their funds locked up in the institution. A glance at the bank’s 2011 financials is further bound to cause anger as the bank recorded an operating loss of $13,000,000. Sources inside the bank have confided that even the bank’s capital base is dwindling by the day and there is no tangible programme in sight to meet the RBZ Capital requirements of $25 million by year end and subsequently $100 million by 2014. NSSA, the bank’s major shareholder has been reluctant to pour in funds into the stricken institution, perhaps avoiding further exposure into the stricken institution. NSSA, the country’s statutory social security authority, has always insisted that the bank recovers all borrowed loans, whose recovery has been very slow due to the fact that the bank has over 98% of its loan book classified as non-performing (meaning that chances of recovering the bank’s loans in the medium term are minimal).
Sources revealed that the bank still has to attract meaningful business especially since most of its clients are still skeptical after the curatorship debacle. The only meaningful deposits the bank is currently getting are from its major shareholder, NSSA, who support the bank in the form of transitory deposits on a regular basis. This has led to suspicions and potential furor from pensioners whose ire is driven by the fact that their funds are being disproportionately used to support the bank and therefore being ultimately siphoned off through exorbitant salaries and perks for management.
What is bound to cause further consternation is the fact that the same management has distributed the bank’s only tangible assets, its vehicle fleet, among themselves. This has seen the bank’s treasurer getting a latest Range Rover Discovery (2010 Model) for a paltry $25,000, which will be deducted from his monthly salary of $8,000 over 5 years. This translates to a measly repayment of $416.67 per month, which is only a drop in the ocean on his gargantuan salary. Managers got 2011 Isuzu Double Cab KB’s for $18,000, compared to market values in excess of $30,000, whilst the low ranking Assistant Managers were awarded Mazda 3 Series for a measly $11,320. The market value of a Mazda 3 at Willowvale Motors is about $25,000. Under this arrangement, the managers are allowed to sell their vehicles at the going market values, thus giving them windfalls. This would inconvenience depositors and other stakeholders in the event of liquidation as the bank has no other viable tangible assets.
A bank official who spoke on condition of anonymity for fear of victimization confirmed these developments, and further confirmed that staff morale among non-managers is at an all-time low and contrary to press statements from the bank’s Managing Director, service delivery has gone down. The bank has also suspended all lending and is experiencing a serious liquidity crisis as shown by the clogged RTGS position. This comes in the wake of a farcical re-branding exercise which saw the bank changing its name from Renaissance Merchant Bank to Capital Bank Corporation. Observers have concluded that the exercise was meant to placate depositors and divert attention to the ensuing looting spree. They have also questioned the role of the RBZ Surveillance Division in not timely detecting and stopping these shenanigans.
At the time of printing, Capital Bank’s capital had dwindled to $9,540,747, down from $21,700,000 after curatorship in April 2012. More will be revealed as events unravel. (Watch this space for Tamayi’s response.)