Before it was shut down by monetary authorities in 2004, Time Bank’s main thrust was commercial banking. Tande said the decision to venture into investment banking is well considered “for a bank which was one of the first indigenous banks to pioneer commercial banking”.
“We see more opportunities in investment banking.
“There are a number of transactions you do which are non- funds-based and you can free income,” he said.
Investment banking involves among others trade and commodity financing, assisting individuals, corporations and governments in raising capital by underwriting and/or acting as the client’s agent in the issuance of securities.
A number of companies listed on the stock market want to raise fresh capital to retool their businesses but are failing to do so as there are no underwriters for capital-raising initiatives such as rights issues.
The subscription rate by shareholders is so low that underwriters remain with the bulk of the issued new shares.
With low salaries prevailing on the market, it means that most of the deposits in the banking sector are short term.
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This means that sustaining a number of branches becomes a tall order as most clients visit banks on few intervals per month.
Tande said his bank was on a restructuring exercise and won’t have the same number of branches it had before it was closed.
During the 2004 banking crisis, the Reserve Bank of Zimbabwe, in its capacity as the monetary services regulator, shut down several commercial banks including Time Bank citing widespread financial irregularities in the fincancial sector.
Some of the affected banks have since regained their licences and have re-opened to the public.
Bank ventures into property development
Time Bank has also ventured into property development.
Under the housing scheme in Mount Pleasant, the bank is selling middle and upper income residential stands.
The scheme also caters for the construction of housing units for resale.
Last year, the bank started offering loans to civil servants.
The Time Bank boss said offering loans and the housing scheme shows the bank’s ability to pick up a market and introduce products tailor-made for that segment.
“The ability to pick a niche market and make products tailor-made for the segment is best done by investment banks because of the level of focus you have,” he said.
