Barbican Bank

From Pindula
Barbican Bank Pvt Ltd
IndustryFinancial Services
FateClosed
FoundedJuly 2003
FounderMthuli Ncube
HeadquartersHarare
Key people
Mthuli Ncube (Managing Director)
ParentBarbican Holdings Ltd

Barbican Bank was a bank in Zimbabwe that was founded in 2003 and shut down a year later by the Reserve Bank of Zimbabwe. The bank was founded and was led by Mthuli Ncube who was reported to have fled the country in 2004 following the closure of the bank. He has however denied that he fled the country.

The bank was shut down by the RBZ after the RBZ accused several bankers then of abusing depositor funds, engaging in illicit foreign currency trades and failing to uphold sound corporate governance standards. Ncube stayed out of Zimbabwe until 2018 when he returned to assume the position of Finance Minister.

Barbican Bank was a subsidiary of the Barbican Holdings Ltd Group. Other subsidiaries of the group included Barbican Asset Management.

Background

Barbican was issued with a banking license in December 2002 and started operations in July 2003. The bank had subsidiaries in South Africa, Botswana and the United Kingdom.

Barbican Bank was officially launched in April 2004. Ncube said at the launch that the bank targeted wealthy individuals and that would focus on “highest quality service deserving of wealthy individuals”. He said that there were enough banks focused on serving the mass market. Ncube also said that the bank was able to make a profit in its first month of operation.[1]

Barbican listed on the Zimbabwe Stock Exchange after a reverse take-over of the Bulawayo family-based retailer Haddon & Sly Ltd (Commonly known as Haddons).

Leadership

  • Chairman: Phineas Makhurane
  • Managing Director: Mthuli Ncube

Bank Closure

In the week of 8 March 2004 Barbican was the subject of investigations by the RBZ's Supervision and Surveillance Unit after it failed to honour local currency payments for the foreign currency it had been allotted in an RBZ auction. Around the same time, Barbican Asset Management failed to provide adequate information to meet new requirements set by the RBZ. The investigation uncovered that the bank and the asset management firm were facing liquidity problems caused by "undercapitalisation, poor corporate governance and violation of the Exchange Control regulations"[2]

On March 15 2004, Barbican Bank was closed and placed under curatorship by the Reserve Bank of Zimbabwe. Barbican Asset Management was placed under liquidation.

Barbican Holdings was subsequently suspended from the Zimbabwe Stock Exchange the following day on Tuesday 16 March 2004.[2]

Commenting on his bank's closure then, Ncube said:

“I think the action taken against us was disproportionate and excessive. There are some banks which were exposed to over $100 billion but were said to be in a sound financial position. I don’t have the full facts of what happened but I’m still shocked, baffled, and confused about these events."[3]

Zimbabwe Allied Banking Group

After closure, the assets of Barbican Bank were combined with those of other troubled banks (Trust bank, and Royal Bank) under curatorship through the Troubled Bank Resolution Plan (TBRP) framework to form Zimbabwe Allied Banking Group on 31 January 2005.

In September 2010, following new issues at ZABG of the abuse of depositor funds, the banks were unbundled into four institutions namely Trust Banking Corporation, Barbican Bank, Royal Bank and ZABG, following the re-registration of the first three. In early 2013, ZABG commenced rebranding to Allied Bank which was owned by politician Obert Mpofu. Allied Bank was eventually closed in 2015.

New License and second closure

On November 22, 2011 the Registrar of Banks issued a notice of intention to cancel Barbican Bank’s licence, but the bank appealed to the Minister of Finance. The minister gave the bank up to July 31 to start operations. Barbican, however, still failed to start operations in the stipulated 12 months, "due to capital constraints, absence of risk management and corporate governance structures necessary for conducting banking business." The bank's registration license was eventually revoked again effective February 25, 2013.[4]

References

  1. Ngoni Chanakira, The Standard, Published: 16 April 2004, Retrieved: 5 July 2019
  2. 2.0 2.1 Shakeman Mugari, Barbican blew own whistle, Zimbabwe independent, Published: unknown, Retrieved: 5 July 2019
  3. Dumisani Muleya, Barbican closure: CEO cries foul, Zimbabwe independent, Published: unknown, Retrieved: 5 July 2019
  4. RBZ revokes Barbican licence, The Herald, Published: 3 March 2013, Retrieved: 5 July 2019