The Bank of Namibia (BoN) has refuted a statement from Trustco Group Holdings (TGH), the parent company of Trustco Bank Namibia (TBN), that depositors’ funds are guaranteed and held by it.

This is after TGH on Friday announced its decision to exit the investment in its commercial banking portfolio, which the group stated accounts for less than 1% of its total investments.

TBN was suspended by the central bank in August last year to rectify what the BoN termed “certain stipulated and communicated instances of non-compliance with the, now repealed, Banking Institutions Act”.

At the end of the suspension period, TBN remained non-compliant with the identified provisions of the relevant legislation, BoN said.

“The BoN has also taken note of TGH’s public statement that depositors’ funds are guaranteed and held by the BoN. This statement is misleading and devoid of all truth. The BoN reiterates that TBN holds depositors’ funds, and that it remains TBN’s responsibility to repay all depositors’ funds. The BoN had previously issued a directive to TBN to ringfence depositor’ funds in a bank account held with a banking institution in Namibia,” reads a statement issued on Friday from BoN spokesperson, Kazembire Zemburuka.

The statement added that BoN directed TBN to present its deposit repayment plan to the central bank today. 

“The Bank wishes to assure members of the public that it will endeavour to ensure depositors are not negatively impacted by the decisions taken by TGH and TBN. The BoN remains committed to fostering banking system stability and integrity by executing its supervisory mandate in line with the provisions of the Act,” the central bank stated.

At the end of July this year, BoN issued a notice of its intention to cancel TBN’s authorisation to conduct banking in Namibia due to its failure to remediate the suspension conditions. “TBN was afforded an opportunity to make representation as to why the (central) bank should not cancel its authorisation to operate as a banking institution. The Bank noted that instead of making the called-for representation as per the provisions of the Act, TBN opted to inform the BoN of TGH and TBN’s decision to discontinue its banking business, with further resolve to return its banking licence for cancellation with effect from today,” BoN stated.

Trustco’s take

Meanwhile, in a statement issued on Friday, 23 August 2024, Trustco stated: “All depositors’ funds are 100% fully secured, and held by BoN”.

In the same statement, Quinton van Rooyen, TGH founder and chairman of the group’s board investment committee, commented on the decision. “In light of recent developments, Trustco has made the decision to exit from investing in deposit-taking institutions in Namibia. Our focus is now shifting towards non-deposit-taking financial services, where we see tremendous growth potential,” he noted.

He added: “This pivot is exemplified by our recently announced transactions. On 23 April 2024, we announced our intention to increase our stake in Legal Shield Holdings Limited to 91.35% by acquiring an additional 11.35% interest for N$468 million. This move will significantly strengthen our position in Namibia’s insurance and real estate sectors, both of which are poised for substantial growth in the post-pandemic era”.-ebrandt@nepc.com.na