Trust Bank posts US$3,6m loss

US$5,3 million from the year and an asset base of US$38,5 million.
Briefing analysts on Friday, group chief executive Mr William Nyemba attributed the depressed performance to the extensive rebuilding exercise that the bank underwent to resume operations.
“Trust Bank regained dilapidated assets and branches after the unbundling exercise of ZABG. To commence operations Trust Holdings Ltd injected fresh capital into the bank to refurbish the bank facilities. Progressively the bank opened nine branches plus four agencies within the first year,” he said.
Mr Nyemba said the branches were already operating profitably, reflecting the bank’s growth potential. 
Advances stood at US$22,5 million as at the end of 2011. Management noted that the loan advances to deposits ratios were high during the period under review, but said it would be working to reduce these ratios to 80 percent to 85 percent in the current year.
Of the income recorded, about 48 percent came from non-interest income, a line that the bank intends to grow in the outlook period. As at the end of the year Trust’s customer base stood at 20 000, which saw the bank’s deposits grow to over US$24 million by the end of the year.
However, due to the short-term nature of deposits in the market currently and the tight liquidity conditions generally, the bank’s management says they did not create as many assets as they would have liked.
For Trust to be able to expand its business and underwrite more loans, it will have to strengthen its balance sheet.
In this regard Mr Nyemba said THL was in the process of engaging investors with whom it is negotiating for capital injection which will be primarily be targeted to the bank.
“Negotiations are currently at an advanced stage with the potential foreign investors with a view to having between US$10 million and US$20 million introduced into the Bank.
“The injection is expected to enable the bank to lend more and also offer better tenures and pricing of the loans. The holding company has ceded one of its assets to the bank which boosted the bank’s capital by US$10 million,” he said.
Meanwhile, Trust is also set to enter into a strategic partnership with local and foreign institutions for lines of credit to lend to various sectors. For instance, the bank has announced a US$5 million line for lending to the small-scale farming community and supporting commodity traders.