With Zimbabwe's largest foreign investors having fallen in line with the country's indigenisation policy, the question banks now face is increasingly how – no longer if – Empowerment Minister Saviour Kasukuwere will localise their ownership.
Foreign-owned banks that would be affected are Barclays, Standard Chartered, Standard Bank's Stanbic, MBCA – which is partly owned by Nedbank, and Ecobank.
However, some banks are unwilling to sell and are threatening to leave the country if forced to comply. A senior bank executive said this week that international banks would pull out if they lost control of their business. International banks would not allow their brands to be used in institutions in which they did not have control, he said.
"A mine's assets are in the ground and its ability to extract resources. These can be quantified. But a bank's asset is its brand. Once control of the local bank is lost, that bank simply ceases to be part of the recognised global brand and public confidence vanishes, resulting in failure of that bank," he said.
Officials in the empowerment ministry involved in structuring the deals for banks say one of the strategies being mooted is to force banks to put up money to fund black businesses and farms as well as to sell shares to locals.
Kasukuwere last year rejected Standard Chartered's proposal to sell only 10% of its local operation.
Empowerment regulations
Boosted by his success in forcing large mines to give up controlling stakes, Kasukuwere this week dared foreign banks to either comply with empowerment regulations or leave.
"We have the money, we can pay for their [foreign banks'] assets," Kasukuwere said.
Last year, the banks found a shield in central bank governor Gideon Gono and Finance Minister Tendai Biti, who both came out strongly against Kasukuwere's threats.
The row calmed as Kasukuwere turned his sights on mines. Now that that sector is completely indigenised, he is turning his attention to the banks.
"I would like to encourage other companies, particularly in the banking sector, to comply with our national laws as noncompliance will no longer be tolerated," Kasukuwere said at the signing ceremony of the Zimplats empowerment deal last Friday.
"Defiance and arrogance will not be tolerated as companies must respect the law and desist from provoking the state. There will be no sacred cow spared, no stone unturned to ensure that the policy is fully implemented," he said.
Fast-track land reform
A year ago, there was scepticism in business circles as to whether mining giant Zimplats would sell 51% of its business to locals, with some predicting a compromise would be reached on a lower threshold.
Speculation among bank executives has now turned to how the banks will be indigenised and many are looking at how the empowerment deal with financial services provider Old Mutual was structured for clues as to how financial services may be treated. As part of the Old Mutual deal, the company set aside a total of 25%: 10% for staff, 9% for pensioners, 2.5% for a "youth-development fund" and 3.5% for black investors. It also had to spend money on a low-cost housing estate and a government-administered national housing fund. Insiders at Old Mutual said negotiations would soon resume on the remaining 26%.
At the centre of Zanu-PF's pursuit of foreign banks is the belief that they deliberately refuse to fund farmers resettled under its land-reform campaign and emerging black businesses.
Before the launch of "fast-track land reform" in 2000, 80% of all bank lending went into agriculture, according to a report last year by the African Development Bank. Farm loans now account for only 22% of all bank lending, the report said.
Hit by a liquidity crisis because of a poor performing economy, banks have little in reserve and are reluctant to lend money to farmers who have no title to put up as security.