HomeNewsTrust Bank reclaims assets from ZABG

Trust Bank reclaims assets from ZABG

-

Trust Bank Corporation Limited is re-possessing all its branches from the Zimbabwe Allied Banking Group (ZABG) in four months after which it would reopen its doors to the transacting public, most probably around January next year.

The bank was relicensed at the beginning of this month along with Royal Bank and Barbican Bank, after six years of litigation following the annexation of its commercial banking assets by ZABG in 2005.

The Reserve Bank of Zimbabwe (RBZ) amalgamated Royal Bank and Trust Banking Corporation into ZABG in 2005 after the curators of the banks reported that the institutions were beyond redemption. Time Bank resisted the forced merger.

Under Trust Bank’s relicensing agreement with the RBZ, all the remaining Trust Bank assets that were arbitrarily transferred to ZABG would be returned, excluding any liabilities.

Trust Holdings group company secretary Ferida Matambo said the board was pleased with the amicable resolution of the issue that forced the holding company to re-list on the Zimbabwe Stock Exchange without Trust Bank Corporation in 2008.

“Trust Banking is re-possessing all its branches and this process is expected to be completed within a period of four months,” she said. “Within this period, the branch network will become operational to deliver banking services to the public.”

Matambo said under the relicensing agreement with the RBZ, all the remaining Trust Bank assets that were transferred to ZABG in 2005 would be returned excluding any liabilities.

The RBZ statement said the reinstated licences would take effect from September 1.

The relicensing of the three banks has rekindled the debate as whether or not the country is over-banked.

Zimbabwe with its small population some analysts argue only required a minimum of five and a maximum of 10 banks.

The country currently has more than 40 financial institutions that are scrambling for about 15% of Zimbabwe’s population that is economically active and potential account holders.

The International Monetary Fund team that visited the country earlier this year said Zimbabwe only needed a maximum of seven banks.

The three institutions were closed in 2004 amid allegations that they were financially unstable and were put under judicial management as a way of trying to revive their operations.

When curators reported that the institutions were beyond redemption, they were amalgamated into the ZABG which commenced operations at the end of January 2005.

However the RBZ has said the relicensing of Barbican, Royal and Trust would have no effect on the legal status of ZABG as it would continue to operate.

Recent Posts

Stories you will enjoy

Recommended reading