AfrAsia Bank’subsidiary, AfrAsia Bank Zimbabwe, has ceased its banking operations in the country to refocus on profitable business lines.

James Benoit, CEO of AfrAsia Bank, said: “The difficulties that AfrAsia Bank Zimbabwe was facing arose primarily from legacy issues within the bank and the difficult economic environment within the country.”

Zimbabwe has been going through an economic slowdown due to liquidity challenges and a fragile global financial environment.

Although the World Bank suggest the Zimbabwean economy will grow by about 3,2% in 2015, local think tank Econometer Global Capital is less optimistic, warning the economy would only grow by a mere 1,2% from about 3,2% in 2014.

The political risk, coupled with growing non-performing loans, deflation, poor revenue performances and flat banking deposits – all weigh down the economy in 2015.

Benoit said: “We have, over the past months, been working diligently to shore up liquidity and capital, in order to provide tangible and sustainable solutions to the current situation faced in Zimbabwe.”

“Discussions with one international investor had reached an advanced stage, but we were unable to get through to a conclusive agreement on satisfactory terms and conditions,” he added.

The decision has been communicated to central bank authorities in both Zimbabwe and Mauritius.

The banking group will continue to focus its efforts on its profitable core business lines and regional expansion as part of its strategic vision.

The termination of banking activities in Zimbabwe will not affect in any manner whatsoever the operations, clients and commitments of AfrAsia Bank in Mauritius and other parts of the world, the Bank said in a statement.

“AfrAsia Bank Limited remains a financially solid institution, well capitalised with strong local and international shareholders.”