The Minister of Indigenisation and Empowerment, Saviour Kasukuwere, said on Friday that banks were next in the government's sights after the mining sector, where it is working to compel foreign-owned companies to cede majority ownership to Zimbabweans in terms of "indigenisation" laws.

Zimbabwe has 26 operating banking institutions, which include 17 commercial banks, four merchant banks, four building societies and one savings bank. Most of these are, in fact, owned by locals.

Foreign-owned banks include Stanbic Bank, owned by South Africa's Standard Bank; MBCA, owned by Nedbank; and Barclays, Standard Chartered Bank and Eco Bank. Foreign banks have a combined deposit base of about $1-billion. CBZ Bank, the biggest bank in Zimbabwe by balance sheet, is partly owned by Absa. Majority ownership in CBZ already rests with Zimbabweans.

Last week Kasukuwere threatened to seize assets of foreign-owned companies within the next two months if they continued to defy the controversial expropriation laws.

President Robert Mugabe and his officials accuse foreign banks of refusing to lend money to local companies and individuals.

They also accuse the banks of furthering and enforcing Western financial sanctions against Zimbabwe.

Speaking at a Confederation of Zimbabwe Industry congress, Kasukuwere said if foreign banks did not want to operate under the laws of the country or did not agree with the indigenisation regulations, they were free to shut down and leave.

"We have been focusing on mining. We will move to the banking sector, we need to ensure banks respect and respond to the aspirations of the people," Kasukuwere told the CZI congress. "You cannot have a bank that behaves like an estranged woman. If they do not want to operate in this country they are free to go.

"They cannot take people's money but refuse to lend to them," he said.

Kasukuwere's remarks are likely to anger the country's Finance Minister Tendai Biti and Reserve Bank governor Gideon Gono, who have been battling to stabilise the fragile banking sector .

Only last week Gono told business executives and bankers in Harare that stability of the banking sector was critical for economic recovery. Gono said despite serious liquidity challenges and other problems, the sector was still safe and sound.

Total banking assets have grown from $2.2-billion in December 2009 to $3.7-billion in December 2010 and $3.9-billion in March this year. From between December 2009 and June 2011, the total banking sector loans and advances increased from $686-million to $2.37-billion.

Gono last week admitted this was positive and dropped his own previous charges against banks for not lending enough.

Gono said he supported the indigenisation objective but not the current approach.

In South Africa, Standard Bank Africa chief executive, Clive Tasker, yesterday said: "Over the last while, Stanbic Bank Zimbabwe has been in consultation with various Zimbabwean government entities including the Reserve Bank of Zimbabwe on the indigenisation process.

"The Zimbabwe Financial Services Sector Committee recommended in March 2011 that indigenisation shareholding in financial services companies should be at 40%. The exact nature of what we are expected to comply with is still therefore work in progress and the subject of some discussion."

By Staff reporter and agencies