Steward Bank retrenches

HARARE - Econet Wireless Zimbabwe (Econet)'s retail banking subsidiary Steward Bank is retrenching as part of strategies to contain costs and streamline operations, businessdaily has established.

According to sources, the bank will shed 127 workers.

It has already served them with retrenchment notices pending finalisation of their packages.

“I can confirm that what you have enquired about is true. Put your questions in writing so that we can respond accordingly,” a senior bank official said.

Econet’s corporate affairs manager Ranga Mberi said the group could not comment while Steward Bank had not responded to e-mailed questions by the time of going to print.

Early this year, Steward Bank closed some of its outlets under a “branch consolidation exercise”.

The financial institution —with 20 branches as of January 2014 — has already shut five units but could not project how many more would be closed.

It said it was in talks with Lifestyle Holdings (Lifestyle), the former owners of the bank, whose furniture retail outlets houses most of its banking outlets.

“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 then.

“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 was 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, Econet increased its stake in Steward Bank — 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.

At the end of last year, Econet said Steward Bank 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 (8)

this is unbeleivable people of zimbabwe, econet has retreched, econet wireless zimbabwe , wat is going on i smell a rat at that bank

twiri - 23 April 2014

this bank has just a handfull of employees and branches, i am made to understand its going to close more outlets from the herald, wat a pity, is strive masiyiwa aware of this, that stupid bank, sorry steward bank is retrenching, with so many subsidiaries why cant they just fit them bit by bit, to econet, liquid, zol than retrenching, i tell yu strive would not help poor people by making his stewards suffer, i am sure these are the very people that put ecocash to light now they are being dumped having succsessfully put it on map, anyway its zimbabwe. the 50k packages you will get should be put to use zimbabwe ikupisa

taurai muromb - 23 April 2014

I don't understand you guys who are quick to criticize. Who is not streamlining in Zimbabwe? Delta has even closed Marondera. Its called streamlining. Earlier on 176 companies closed accordingf to a report last week or so. Its the economy that is failing and these are all signs that the economy is bleeding. Chinamasa has even hinted on stopping Japanese imports of cars. U know wat it means? all the people employed in this are going to be rendered jobless!

tonde - 23 April 2014

Chitaura Makandiwa neboom yako kana vanhu vachirasa mabasa like this. wakatamba ne Mugabe ukadyanaye mundiro imwechete. Hauna kwauchatizira. Mukambenere. Uchademba kuti akauzivireyi. Comrade makandiwa more closures are coming before your mouth is shut.

dd - 24 April 2014

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GALLERYCARTRIDGES - 24 April 2014

Pple lets sober up n try to understand the whole story b4 we comment. To me it is clear tht Econet took over TN Bank n they carried out their own feasibilty study as new owners n they saw the need to streamline for the business to remain viable. Here is what Mboweni said “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.” As for Ecocash here is what he had to say “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.” Now guys this is what is called sound management. Why keep pple on the job at the expense of the whole business running into the red. Of all the banks I think they are one of the better capitalised at over $75 million. I am sure those who will be retrenched will be amongst very few workers who get to enjoy their retrencment packages because they will be paid unlike most other retrenchees even from state institutions. Infact these guys I think will be better off than many pple still on the job in most of the companies in Zim, thats if they use thier packages properly.

CFP - 25 April 2014

admin uyu muface wematonner anetsa uyu refer this person to classifieds

shava - 28 April 2014

murombedzi waida ma babie ku stanchart zvekuti hende, i know he is hearding the retrenching process mababie ake ese akasara, uyuwo ben muchina jus refer to http://www.standardmedia.co.ke/?articleID=2000021675&story_title=my-boss-wanted-sexual-favours

kuku - 30 April 2014

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