HomeBusiness DigestTrust boss wants to clean up mess

Trust boss wants to clean up mess

Ngoni Chanakira

TRUST Bank managing director Dominic Magwada says his bank has sought the backing of First Mutual Ltd and the National Railways of Zimbabwe Contributory Pension Fund to guarantee funds borrow

ed from the Reserve Bank of Zimbabwe (RBZ).

Magwada, who took over at Trust on Monday, said this on the back of conditions set by the RBZ before releasing liquidity support to the institution.

The RBZ demanded that Trust fire its bosses and secure collateral security and guarantees from shareholders in order to receive liquidity support. About $80 billion is needed.

In an interview this week, Magwada said the Trust board was engaged in discussions with shareholders on possible additional support to further strengthen the bank’s capital base.

“We are still paying back the money given to us by the Reserve Bank. We are confident that these initiatives will be successful,” he told businessdigest.

“The liquidity support has gone a long way towards stabilising the operations of the bank. Key institutional shareholders who include First Mutual and the NRZ Contributory Pension Fund provided collateral security to support the Reserve Bank of Zimbabwe facility.”

The NRZ is the second largest institutional stakeholder in Trust Holdings with a 9,36% stake. FML, on the other hand, is the seventh largest institutional investor with a 5,13% stake. Other major shareholders include the Zimbabwe Electricity Supply Authority Staff Pension Fund with 8,19%, Ludham Investments (Pvt) Ltd 8,07%, and Old Mutual Life Assurance Company Zimbabwe Ltd 6,62%.

Trust Banking Corporation suffered from a liquidity crunch which was exacerbated by fraud within the group. This resulted in dampened customer confidence as evidenced by panic withdrawals from the bank.

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