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Time Bank shifts to investment banking

Bernard Mpofu

TIME Bank, a re-licensed commercial bank, says it has transformed its focus to investment banking and will in March commence taking deposits from the public. 

Chris Takura Tande, the managing director of the bank that was closed seven years ago and only re-licensed in 2009 after a bitter legal wrangle, told the Zimbabwe Independent  this week that the financial institution will be re-opened in phases.
“Time Bank has decided to go the investment banking route,” Tande said in written response to questions from the Independent. “Under this business plan, the bank will be re-opened in phases. As part of phase one of such a business model, the bank commenced lending activities without taking any deposits from the public.”
He said the loans were coming from “shareholders funds and for a specific housing project and related business”.
The bank has secured from its shareholders a line of credit of US$20 million to finance the current projects.
“Besides the housing project there are a number of projects that are lined up which have a significant impact on the needs of our clients,” Tande said. “The last phase will be deposit taking from the public, and we intend to start taking deposits by March 2011. We are not in a hurry to mobilise deposits to support our business plan.”
In 2009 the Reserve Bank of Zimbabwe agreed to the restoration of the bank’s operating licence after the Administrative Court ruling its 2004 closure by the central bank.
The bank was placed under a curatorship in 2004 and subsequently its licence cancelled in 2006, but the Administrative Court reinstated the licence in 2009.
Local media has been in recent weeks carrying Time Bank advertisements of “The Golden CT Suburb”— upmarket residential stands which can be purchased through the bank as part of its plan to grow the balance sheet.
The bank, according to Tande, sees “a lot of opportunities” in investment banking, a banking sector currently not so active owing to liquidity problems.
Central bank figures show that commercial banks account for 87% of the total assets whilst building societies and merchant banks accounted for 8% and 4% respectively.
Asked how they will transact in investment banking when they have a commercial banking licence, Tande said: “Investment banking can be done in the context of a commercial banking licence. The commercial banking licence offers the widest range of banking activities, and from the list of permissible banking activities, Time Bank will emphasise those activities that are normally done by investment banks.”
Investment banking entails financing projects, assisting individuals, corporations and governments in raising capital by underwriting and/or acting as the client’s agent in the issuance of securities.
Like most financial institutions, Tande said, his bank is undergoing massive restructuring and streamlining of operations that will result in downsizing branch network and centralisation of operations.
Following the introduction of multiple currencies in 2009, several banking groups disposed of units and rationalsised operations in their bid to realign capital positions and business.
The bank has four branches in Harare and a branch each in Bulawayo and Mutare, which have been maintained since 2004 although they remained under lock and key.
“We have developed a business plan that does not rely on using deposits from the public,” he said. “The organic growth of the bank will begin from utilisation of shareholders funds, and proceed to turnover a lot of non-funds-based business, thereby earning a significant non-interest based income,” he said.
Last February the bank began offering a loan scheme that attracts 5% interest with the loans being repayable within six months.

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