REGIONAL financial services group, BancABC says the adoption of multiple currencies resulted in a surge in operational costs at its Zimbabwe subsidiaries which rose to US$9 million, a 54 percent jump compared to the corresponding period in 2008.

In a statement accompanying its financial results for 2009 the group, which has operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe said although the shelving of the Zimbabwe dollar had helped stabilise the country’s economy, businesses had however seen a jump in costs.

“In February 2009, Zimbabwe adopted a multi-currency system resulting in the Zimbabwe dollar being discontinued as legal tender and ending an era of hyperinflation.

“The Zimbabwean operation recorded costs of some BWP62 million (US$9 million), whereas virtually no costs were recorded during 2008 as these were effectively eliminated by inflation.

“This, coupled with costs incurred due to the retail banking rollout, resulted in operating costs increasing by 54 percent,” the group said.

BancABC, which is listed in Botswana and has a secondary placement on the Zimbabwe Stock Exchange (ZSE) said although the stemming of inflation had assisted businesses and increased operational predictability, the lack of liquidity was still a major concern.

“The banking sector still suffered under the effects of the lack of liquidity as a result of weak economic activity, insufficient foreign direct investment (as well as the) lack of capacity of the lender of last resort (RBZ) and an inactive inter-bank market,” the group said.

However despite these challenges BancABC’s Zimbabwe operations were among the best performing, turning in a profit of about US$2.8 million.

The group said it had recorded a solid performance across its regional operations except in Zambia where a loss of about US$7 million was recorded.

BancABC also announced the retirement of Chairman and renowned Zimbabwean business executive Oliver Chidawu who leaves the group to pursue other interests after serving the company for nine years.

The diversified financial institution was established in 1997 through the merger of First Merchant Bank and Heritage Investment Bank with the principal sponsorship of the Heritage Group of companies and Anglo American Zimbabwe limited.

The group was registered and listed in Botswana with a secondary listing on the ZSE in 2000.