Steward Bank in branch closure

HARARE - Steward Bank (Steward) is closing some of its outlets under a “branch consolidation exercise”.

The financial institution — currently with 20 branches — has already shut four units and one more this January but could not project how many more would be closed.

It said it is in talks with Lifestyle Holdings (Lifestyle), the former owners of the bank, whose furniture retail outlets houses most of Steward’s branches.

“As you are aware, the majority of the bank’s branches are within Lifestyle Holding outlets. There are progressive discussions between the two organisations to establish Lifestyle’s strategic perspective particularly on its geographical footprint as this has a significant bearing on the bank. Thus we will be able to have certainty on the nature and extent of the consolidation once this engagement has been completed,” the bank’s official told businessdaily.

“Our branch consolidation is both internally and externally driven. While we have a good idea about our internal plans, we do not have much control on externally driven dynamics,” he added.

However, while staff from the affected branches had been absorbed within the bank, the official said it is premature to provide a credible assessment of the impact on workers in terms of job losses “since the extent of the exercise hasn’t been concluded”.

Early last year, Zimbabwe’s largest mobile network operator Econet Wireless (Econet) increased its stake in Steward — then TN Bank Limited — from 45 percent to 97,96 percent in a cash and share swap deal.

Under the transaction, Econet paid cash for 830 417 TN Bank shares while 72 542 997 shares were exchanged for Econet’s.

Steward is currently capitalised to the tune of $76,9 million.

Last month, Econet said Steward was sound and would not be affected by the prevailing liquidity crisis.

This was on the back of several indigenous banks facing viability challenges and struggling to fund depositors’ withdrawals.

Econet’s chief executive Douglas Mboweni said since taking over the financial institution, the group had implemented tough restructuring measures.

“We brought in experts who looked very carefully at what was needed to operate a bank successfully in a market with no lender of last resort.

“We cleaned up the balance sheet, wrote off bad loans, and fully recapitalised the bank. We eliminated all systemic weaknesses,” he said.

Mboweni added that “in a market with no lender of last resort, the shareholder of the bank must be very strong financially and the bank must be properly capitalised.”

He also said that funds from EcoCash, the group’s mobile money transfer service, are managed through a special trust arrangement set up with the approval of the Reserve Bank, and the trust has its own independent trustees, who have nothing to do with the bank or its shareholders.

“We do not touch that money. If you send money, we have it, and we do not lend it. If every single person came for their money tomorrow, we will have it. We have every single cent of that money. If an agent fails to pay, we will pay, and if the bank fails to pay, Econet will pay,” he said.

Comments (2)

Mr Mboweni those are strong words about ecocash. I am sure this will continue to inspire confidence in your product

siyaso - 7 January 2014

Another indigenous bank certifying itself as health not mentioning the several millions loss it made this past year.

inini - 8 January 2014

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