FBME Tanzania

FBME bank has offices in Cyprus and Tanzania. Although the operation takes place at FBME bank Cyprus, the Tanzania branche has many customers as well. The problem with FBME is that both branches are interwoven with eachother but also not. This sounds strange, but the customer service in Cyprus doesn't have a clue what happens in Tanzania and vice versa. 

 

This situation is fine when all goes smoothly. However when things get out of control - as they currently are - it is not good for the bank, not good for the stakeholders and not good for the customers. So, how do they manage? Strange enough, it looks like the bank is just buying time. But for what? Nobody knows what is going to happen in the future but one thing is a certainty, when the bank opens its doors again - after being closed for almost a year - there will be a bank run. The question is not if a bank run will arise but how soon the bank will be in severe solvency problems and has to close. It's not a scenario most people want to be in, but FBME Cyprus is the unfortunate winner of all times. 

 

But how about Tanzania? Is it as bad overthere as in Cyprus you might think? 

 

Well, it is different. The legal consequences of a bank under resolution are similar but not exactly the same. Cyprus has the advantage that it is a European country and uses the Euro as main currency. Therefore there are no corresponding banks needed to convert the currencies being held at bank accounts. In Tanzania things are different. Most customers from FBME bank in Tanzania have offshore businesses, are wealthy individuals or have something to hide. 

 

The latter option fortunately doesn't have to be 100% criminal. There are many reasons people want to hide and FBME Tanzania provided the solution. Unfortunately it brought them in deep problems. Problems that don't have a tangible, always working solution for everybody.