Godfrey Marawanyika/Chris Goko
THE Zimbabwe Allied Banking Group will next year start to operate as a loose amalgam with three troubled banks conducting business under their original titles.
The amalgamation of the banks to form a composite unit will only be achieved in the middle of 2006 at the earliest, banking sources revealed this week. The arrangement will enable depositors to access their funds in the new year.
Three troubled banks — Trust, Time and Royal — are expected to reopen for business under the direction of curators who will now assume the title of administrators.
The administrators will in turn report to a board of directors of ZABG Ltd. The three banks will however not operate using their original licences as these have now been cancelled.
The government is soon expected to gazette enabling legislation through a presidential decree. The statutory instrument will enable the Reserve Bank to set up a board for ZABGL and to convert the curators into administrators. It will also facilitate the transfer of the troubled banks’ assets and liabilities to the new entity.
Trust Bank, which was put under curatorship in September, will be the first to reopen on January 1. Time Bank -was put under curatorship last month while Royal closed its doors in August. The two banks are expected to reopen for business later in the first quarter of next year. The fate of Barbican Bank, which was placed under curatorship in March, was not clear at the time of going to press.
In his monetary policy review statement last month RBZ governor Gideon Gono said troubled financial institutions would gel into one unit known as ZABG. The entity, he said, would be a strategic business unit of the central bank with government and troubled banks’ investors and depositors as key stakeholders.
The curator of Trust Bank Peter Bailey this week sent an update to staff at the bank informing them of the latest developments.
“Trust Bank will become a strategic business unit of ZABGL and will reopen for business with effect from January 1 2005, although operationally, banking halls will reopen on January 2 2005,” said Bailey.
“All transactions will be conducted under Trust Bank brand until and when all the banks falling under ZABGL have been merged into one single entity,” he said.
He also said his title would change to administrator.
“This is an administrative and legal requirement to facilitate the opening of the bank and oversee the merger with other banks who will become divisions of ZABGL,” he said.
The Zimbabwe Independent heard this week that promoters of the venture, notably the central bank, had moved to correct a statutory oversight in the formation of ZABGL by commissioning senior Harare attorney Lindsay Cook to put together the legislative framework, due to be introduced as a statutory instrument.
Cook on Tuesday confirmed his involvement in the ZABG project, but declined to discuss the matter citing client confidentiality.
“This is a client issue,” said Cook. “They have approached me to help. I can’t talk about my involvement in ZABG,” he said.
It has also been established that Chamber of Mines president and industrialist Jim Saunders, and prominent lawyer Muchadeyi Masunda, are prime candidates for the ZABGL board.
The board members, administrators and senior management at the banks should this month hold a strategic planning workshop on how to run the entities with a view to completing the merger.
Information to hand shows that the Amalgamated Bank of South Africa (Absa), a 26% majority shareholder in Gideon Gono’s former employers, Jewel Bank, and on whose template ZABG is said to have been modelled, will come in as a technical partner.
It has already started offering technical assistance.