Trustco Bank to Take Over Fides Clients

Trustco Bank Namibia says financial services for micro entrepreneurs in the capital will resume once its purchase of the former Fides Bank is approved by the Bank of Namibia and the Namibian Competition Commission.

Trustco’s group head for the Banking Division, Erastus Hoveka, told Nampa on Monday that the previous shareholders of the then micro-finance bank, Fides Bank Namibia Limited, took the decision to halt the process at the Windhoek branch.

“The process was stopped by the former shareholders. We have not effectively taken over yet, we only signed an agreement. Once we get approvals from the Bank of Namibia and the Namibian Competition Commission, we will continue,” he said.

Two weeks ago, Trustco Group of companies announced that it has concluded a transaction to acquire 100% of Fides Bank, one of six licensed banks in Namibia.

Fides opened its Windhoek branch in the Katutura residential area in November 2012, with the aim of offering financial services to micro entrepreneurs in that area. The bank however stopped providing loans to its clients at the Katutura branch at the beginning of this year, while the process continues at the Oshakati, Oshikango, Ondangwa, and Outapi branches.

Before the Trustco takeover, Fides said it was planning to downsize its activities in the capital, as they were too costly to develop and have not yielded the expected socio-economic returns. The operations also proved to be economically unsustainable.

Trustco, in a media statement issued to announce the purchase of Fides on 22 May, said the bank’s loan portfolio currently consists of over 14 000 borrowers ranging from individuals to small businesses. Its savings portfolio also includes the deposits of 40 000 individuals.

According to Trustco, key to the bank’s expansion strategy will be the use of mobile banking and alternative service channels combined with traditional infrastructure.

Trustco is planning to raise additional capital in the market through a combination of debt and equity to improve the bank’s balance sheet and to ensure that the bank is well capitalised.

“To achieve a broad-based funding book, the aim is to achieve an optimal mix of retail, wholesale, on-shore and off-shore funding. The bank offers the best strategic fit and an opportunity to complement the already successful student lending, mortgage lending and insurance businesses of Trustco. By leveraging the current student lending business and properties in the real estate portfolio, the bank will facilitate a wide range of financing options,” the company said.


Source : The Namibian