Trust Bank closed

Staff Writers

TRUST Bank Ltd, a subsidiary of Trust Holdings Ltd, was yesterday placed under curatorship for six months by the Reserve Bank of Zimbabwe (RBZ) because of persisting liquidity problems.
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Trust becomes the fourth commercial bank to be placed under curatorship this year. Intermarket, Barbican and Royal have met the same fate.

The RBZ has appointed Peter Bailey of KPMG Chartered Accountants (Zimbabwe) as the curator.


This comes barely seven days before the September 30 RBZ deadline for banks to raise their minimum paid-up share capital to $10 billion.


Trust has over the past year been baled out by the central bank enabling it to remain afloat.


At the time of its closure yesterday, the bank owed the RBZ about $1,4 trillion, an amount equal to the country’s domestic debt.


Problems at Trust came to a head on Wednesday when board chairman, Tichaendepi Masaya, was booted out at the bank’s emergency general meeting.


“The RBZ took this action after determining that the various turnaround strategies and measures that Trust Bank had pursued failed to address the liquidity and solvency challenges the bank has been facing since the last quarter of 2003,” the RBZ said in a statement yesterday.


It said notwithstanding the assistance granted to Trust under the Troubled Banks Fund, liquidity challenges persisted.


Mergers failed to materialise whilst the bank’s shareholders were unable to recapitalise the bank.


The RBZ said one of the consequences of placing Trust under a curator was that the “institution of all legal proceedings and the execution of writs, warrants and summons is now stayed”.


This means that the bank will be closed for the next six months.


The latest development comes hard on the heels of the extension of curatorship for Barbican and Intermarket by the central bank this week.


On Tuesday RBZ governor Gideon Gono told a parliamentary enquiry that nine financial institutions might not be able to meet their capitalisation

requirements.