Trust Banking Corporation
Encyclopedia
Trust Banking Corporation (TBC), commonly referred to as Trust Bank, is a commercial bank
in Zimbabwe
. It is one of the seventeen (17) licensed commercial banks in the country.
. , the bank's total asset valuation was reported as US$17.4 million, with shareholders' equity of US$16.6 million.
. The bank grew rapidly, and by 2003, it had become the largest bank in Zimbabwe by balance sheet size. However, its growth came with several problems. As the Zimbabwean economy deteriorated, managers of the bank started in engaging in non-core activities.
In 2004, it was closed down by the Reserve Bank of Zimbabwe
(RBZ), the national banking regulator. The assets of the bank were merged with those of Barbican Bank and Royal Bank Zimbabwe
, both of which had also been shut down by RBZ, to form Zimbabwe Allied Banking Group (ZABG). The major reason was that the bank was illiquid and its managers had been irresponsible in managing depositors's funds. Prior to this corrective action, Trust has suffered a ZW$7 billion fraud committed by its own staff. This was attributed to weak controls and risk management systems. This worsened its liquidity position, which had hitherto started to deteriorate. In December 2003, banks such as and Stanbic Bank began rejecting to settle Trust Bank cheques because of its precarious liquidity position. It was kicked out of the central clearing system a several times. Following these incidences, Gideon Gono
, the RBZ governor, demanded the resignation of William Nyemba (the then CEO), Nyevero Hlupo (who was then the Finance Director) and Chris Goromonzi (who was an executive director). This was a condition for the bank to get liquidity support from the RBZ. A new Managing Director, Philip Magwada was hired to manage the bank. He was instrumental in getting Trust Bank into ZABG.
Following the dismissal, the dismissed executives challenged the amalgamation of Trust Bank assets into ZABG. Having gone through the litigation route, the cases were dismissed by the High Court and parties appealed to the Supreme Court, which culminated in the Supreme Court also dismissing the cases, but ruled that appellants had overlooked the need to, and must
still, appeal to the Reserve Bank in the first instance, as provided by Law, against the alleged “sell” of the two banks’ assets to ZABG.
In September 2010, the RBZ reversed itself and re-issued the commercial banking licenses of the three banks that had been closed. ZABG also retained its banking license, bringing the total of commercial banks in the country to seventeen (17). Trust Bank resumed banking business as a self-sufficient entity on 13 December 2010.
, leasing
, insurance
and banking. The stock
of THL is listed on the Zimbabwe Stock Exchange
, where it trades under the symbol: TRUST.
Commercial bank
After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...
in Zimbabwe
Zimbabwe
Zimbabwe is a landlocked country located in the southern part of the African continent, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia and a tip of Namibia to the northwest and Mozambique to the east. Zimbabwe has three...
. It is one of the seventeen (17) licensed commercial banks in the country.
Overview
Trust Bank is a small financial services provider in ZimbabweZimbabwe
Zimbabwe is a landlocked country located in the southern part of the African continent, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia and a tip of Namibia to the northwest and Mozambique to the east. Zimbabwe has three...
. , the bank's total asset valuation was reported as US$17.4 million, with shareholders' equity of US$16.6 million.
History
The bank was founded in 1996 as Trust Merchant Bank. It transformed its banking licence to commercial banking licence in 2000, paving the way for its transition to Trust Banking CorporationTrust Banking Corporation
Trust Banking Corporation , commonly referred to as Trust Bank, is a commercial bank in Zimbabwe. It is one of the seventeen licensed commercial banks in the country.-Overview:Trust Bank is a small financial services provider in Zimbabwe...
. The bank grew rapidly, and by 2003, it had become the largest bank in Zimbabwe by balance sheet size. However, its growth came with several problems. As the Zimbabwean economy deteriorated, managers of the bank started in engaging in non-core activities.
In 2004, it was closed down by the Reserve Bank of Zimbabwe
Reserve Bank of Zimbabwe
The Reserve Bank of Zimbabwe is the central bank of Zimbabwe.-History:The bank traces its history to the Bank of Rhodesia and Nyasaland, founded in March 1956, which in turn was the successor to the Central Currency Board....
(RBZ), the national banking regulator. The assets of the bank were merged with those of Barbican Bank and Royal Bank Zimbabwe
Royal Bank Zimbabwe
Royal Bank Zimbabwe, whose complete name is Royal Bank Zimbabwe Limited, but is commonly referred to as Royal Bank, is a commercial bank in Zimbabwe. It is one of the licensed commercial banks in the country.-Overview:...
, both of which had also been shut down by RBZ, to form Zimbabwe Allied Banking Group (ZABG). The major reason was that the bank was illiquid and its managers had been irresponsible in managing depositors's funds. Prior to this corrective action, Trust has suffered a ZW$7 billion fraud committed by its own staff. This was attributed to weak controls and risk management systems. This worsened its liquidity position, which had hitherto started to deteriorate. In December 2003, banks such as and Stanbic Bank began rejecting to settle Trust Bank cheques because of its precarious liquidity position. It was kicked out of the central clearing system a several times. Following these incidences, Gideon Gono
Gideon Gono
Gideon Gono is the current Governor of the Reserve Bank of Zimbabwe and former CEO of the Jewel Bank, formerly known as the Commercial Bank of Zimbabwe...
, the RBZ governor, demanded the resignation of William Nyemba (the then CEO), Nyevero Hlupo (who was then the Finance Director) and Chris Goromonzi (who was an executive director). This was a condition for the bank to get liquidity support from the RBZ. A new Managing Director, Philip Magwada was hired to manage the bank. He was instrumental in getting Trust Bank into ZABG.
Following the dismissal, the dismissed executives challenged the amalgamation of Trust Bank assets into ZABG. Having gone through the litigation route, the cases were dismissed by the High Court and parties appealed to the Supreme Court, which culminated in the Supreme Court also dismissing the cases, but ruled that appellants had overlooked the need to, and must
still, appeal to the Reserve Bank in the first instance, as provided by Law, against the alleged “sell” of the two banks’ assets to ZABG.
In September 2010, the RBZ reversed itself and re-issued the commercial banking licenses of the three banks that had been closed. ZABG also retained its banking license, bringing the total of commercial banks in the country to seventeen (17). Trust Bank resumed banking business as a self-sufficient entity on 13 December 2010.
Ownership
TBC is a 100% subsidiary of Trust Holdings Limited (THL), a Zimbabwean financial holding company, involved primarily in financeFinance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
, leasing
Leasing
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments....
, insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
and banking. The stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
of THL is listed on the Zimbabwe Stock Exchange
Zimbabwe Stock Exchange
The Zimbabwe Stock Exchange, or ZSE, is the official stock exchange of Zimbabwe. It has been open to foreign investment since 1993. The exchange has about a dozen members and over 65 listed securities...
, where it trades under the symbol: TRUST.
Affiliated companies
Trust Holdings Limited (THL), the holding company, is sometimes referred to as the Trust Group of Companies or simply as the Trust Group. The subsidiaries of THL include the following:- Trust Bank
- Trust Insurance Brokers Limited
- Trust Properties Limited
- Trust Agriculture Limited
Branch network
, Trust Bank maintains a network of branches at the following locations:- Main Branch - Trust Towers, HarareHarareHarare before 1982 known as Salisbury) is the largest city and capital of Zimbabwe. It has an estimated population of 1,600,000, with 2,800,000 in its metropolitan area . Administratively, Harare is an independent city equivalent to a province. It is Zimbabwe's largest city and its...
- Bulawayo Branch - BulawayoBulawayoBulawayo is the second largest city in Zimbabwe after the capital Harare, with an estimated population in 2010 of 2,000,000. It is located in Matabeleland, 439 km southwest of Harare, and is now treated as a separate provincial area from Matabeleland...
- Nine (9) other branches have now opened, according to ZimbabweZimbabweZimbabwe is a landlocked country located in the southern part of the African continent, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia and a tip of Namibia to the northwest and Mozambique to the east. Zimbabwe has three...
an media reports.
- Nine (9) other branches have now opened, according to Zimbabwe
See also
- List of banks in Zimbabwe
- Reserve Bank of ZimbabweReserve Bank of ZimbabweThe Reserve Bank of Zimbabwe is the central bank of Zimbabwe.-History:The bank traces its history to the Bank of Rhodesia and Nyasaland, founded in March 1956, which in turn was the successor to the Central Currency Board....
- Economy of ZimbabweEconomy of ZimbabweThe economy of Zimbabwe has shrunk significantly after 2000, resulting in a desperate situation for the country and widespread poverty from among others 94% unemployment. The participation from 1998 to 2002 in the war in the Democratic Republic of the Congo set the stage for this deterioration by...