Despite continued loss of confidence in the banking system by the public, banks continue to make super profits, sparking accusations that the financial institutions are ripping off depositors through high bank and service charges.
Many banks registered double digit growth in both revenue and profit after tax on the back of increased transaction volumes and investment in high yielding assets, according to analysts.
Contrastingly, this is happening at a time when public confidence and trust in the banking sector is at an all time low, raising suspicions that banks could be ripping off customers with high service and transaction fees.
“If one looks at the results of the banks released recently, all banks made killer profits and these profits are coming not from their mainstream activities but from charging customers high fees. In fact depositors lose by depositing money into their bank accounts,” said Mr Christopher Mugaga, an economist.
A financial analyst, Mr Batanai Matsika however said fees, commissions and bank charges are not extortionate as they are regulated by the Reserve Bank of Zimbabwe (RBZ), adding that banking is a numbers game and these charges are set considering the size of the economy.
“The biggest issue here is to consider that banks have to stay afloat, so they have to charge what is deemed profitable. Nevertheless most of the banks’ profits are coming from high transaction volumes as people are using plastic money not necessarily because the fees are high,” he said.
Mr Matsika revealed that interest is not earned by simply opening a bank account and attributed financial illiteracy to the limited knowledge of interest earning investment vehicles such as unit trusts and time deposits which can also increase the value of deposits.