Kingdom Bank Limited (“KBL”), a subsidiary of Kingdom Financial Holdings Limited (“KFHL”) (“Kingdom”) will with effect from 28 February 2009 close two branches, namely Samora Machel and Chitungwiza branches. That will bring the bank’s branch network down to 16. With effect from 1 March 2009, the accounts domiciled at these two branches will fall under the control of Regional Manager (Central), KBL. The Chitungwiza Automated Teller Machine (“ATM”) will be moved to TM Supermarket Chitungwiza premises within the Town Centre, based on the previous in-store model which arose out of the Kingdom / Meikles relationship.
Developments in the economy in general and the financial services sector in particular, have resulted in significant levels of financial disintermediation, where the money market business has virtually dried up, phased cash limits translate to low branch traffic, few cheque and RTGS transactions are processed and borrowing in local currency is negligible. Furthermore, the stalemate on the Zimbabwe Stock Exchange (“ZSE”) since 18 November 2008 means that stock broking and asset management companies are idle, and finally the global recession has virtually bankrupted a number of institutions over night and in the process squeezed out local players from raising external lines of credit.
“Against this background, KFHL have instituted some far-reaching changes as a means of preserving the Kingdom brand,” Group Chief Executive Officer, Onias Makamba comments, “in order to give the business a fighting chance at survival.” These changes will include the reduction of branches, group wide, and a staff rotation system, which will reduce costs through managing hours worked per man per month, and related staff costs. This means that for departments where the volume of work is variable and or low, a shift hours system will commence from 1 February 2009. Makamba adds, “We are certain about one thing; there is an urgent need to reduce costs through implementation of radical survival strategies.”
In the meantime, survival, and eventually stability for the Group, hinges on the ability to identify and engage in core business activities that generate foreign currency, and while this cannot happen over night, management continues to pursue strategies to increase forex revenue, notwithstanding challenges posed by the operating environment. By all accounts, this will be a gradual process with the desired results only being realized in the medium to long term.
Kingdom Financial Holdings Limited is itself a subsidiary of Kingdom Meikles Limited, a conglomerate whose businesses, apart from financial services, include retail stores, supermarkets, tea and beverages production, hotels and textiles.