Trust Bank is back

TRUST Banking Corporation Limited reopened for business yesterday after a six-year absence. The bank is operating a branch at Trust Towers while another branch is set to open in Bulawayo on Monday.
An additional eight branches are expected to start operating in January next year.
Trust Holdings chief executive Mr William Nyemba said the Bulawayo branch was ready to roll.
"We have reopened our Harare branch while the Bulawayo branch is ready to start operations and an additional eight branches throughout the country will be ready by January," said Mr Nyemba. The reopening of the bank comes after the Reserve Bank of Zimbabwe registrar of banking institutions Mr Norman Mataruka gave the nod for it to start operations with effect from yesterday.
"Take note that Trust Banking Corporation Limited has been authorised in terms of Section 16 of the Banking Act (Chapter 24:20) to commence the business of a commercial bank with effect from December 13," read part of the RBZ statement.
Trust Bank has also completed repossessing all its branches giving impetus to the drive to re-open for business.
The bank, which was one of the leading indigenous banks in the country before 2004, was issued with a commercial banking licence by the RBZ on September 1, paving way for its re-launch.
Two other banks ' Barbican Bank and Royal Bank ' which were closed in 2004 and amalgamated into Zimbabwe Allied Banking Group were also issued with banking licences and are yet to announce when they are going to start operations.
If the three banks resume operations they will bring the number of commercial banks in Zimbabwe to 17.
The three banks succumbed to the RBZ's 2004 clean-up to rid the financial sector of speculative transactions and other practices that dragged the country into an economic mess.
Mr Nyemba said THL, the holding company, was working on a recapitalisation plan and proceeds would also be directed towards the recapitalisation of the bank.
Trust Bank is coming on board at a time when undercapitalised banking institutions are struggling to raise the Reserve Bank of Zimbabwe minimum capital requirement levels whose deadline is December 31.
With more banks coming on the market, competition in the sector is mounting with smaller institutions expected to rope in partners or merge operations to meet central bank requirements. Under the new thresholds announced last year, by December 31, commercial banks are supposed to have raised US$12,5 million as minimum capital, merchant banks US$10 million, building societies and discount houses US$7,5 million and asset managers US$500 000.
Zimbabwe's financial sector is struggling due to low liquidity levels.. 
The sector has also failed to offer long-term financing as the majority of the banks are getting their income from non-interest activities mainly due to the absence of alternative investment instruments such as Treasury bills and other Government securities.
Ideally, the main income stream for banks should be net interest (interest from core operations) and this should be able to cover the banks' operational costs.
Non-interest income broadly consists of dealing income, commission and fees, income from sale of assets as well as fair value adjustments.