Branch expansion weighs down Trust

HARARE - Trust Holdings flagship, Trust Bank, posted a $2,18 million loss for the half year ended June 30 2012 as a result of an extensive branch rebuilding exercise and roll out programme that it underwent to resume operations.

Trust Holdings chief executive William Nyemba said the majority of its launched branches had now turned profitable.

As part of the branch roll-out drive, the bank established nine branches and four agencies in economically active centres in the country.

The bank also increased its product offering to include, Western Union, Yuan Trade, Trust Star a children’s savings account, Banc Assurance in partnership with insurance companies, among others.

“We have instituted cost containment and management measures and strategies to improve revenue generation are being pursued. Barring any unforeseen developments, these measures should see the bank returning to profitability,” he said.

Nyemba said the bank’s focus would be on efficiently widening the product range for retail customers as well as enhancing the distribution and service channels through the use of its strong branch network.

Trust Bank’s net interest income totalled $2,2 million since the bank was very aggressive during the period,with loans and advances increasing to $22,5 million from $22,4 million in the prior year.

“While most of the bank’s branches have turned to profitability, the second half of the year is aimed at ensuring that the entire business becomes profitable. Strategies have been crafted and implemented to which will see the bank achieving this goal in the short to medium term,” he said.

Customer deposits increased to $27,5 million with $9,2 million being demand deposits while $18,3 million are time deposits. In the period under review, the bank’s core capital base amounted to $18,63 million, while total assets grew significantly from $38,5 million in the previous period to $50,1 million.

Nyemba said the financial institution will continue to work towards compliance with the proposed minimum regulatory capital levels that have been recently announced and also other statutory requirements governing its operations.

Trust Bank re-opened its doors for business in December 2010 after a six-year absence following the re-registration of the financial institution by the Reserve Bank Zimbabwe.

Trust Bank, together with Royal Bank and Barbican Bank were closed in 2005 following a liquidation of the banking institutions, which had been declared insolvent and merged to form the Zimbabwe Allied Banking Group (ZABG).

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