|Renaissance Bank out of the woods|
|Thursday, 05 July 2012 11:42|
Senior Business Reporter
RENAISSANCE Merchant Bank has closed the chapter on its immoral and troubled past amid revelations the company was now poised to attain profitability by the end of the year.
The bank has reportedly made tremendous progress since coming out of recuperative curatorship in March this year, with business relations already re-established with a number of old clients.
RMB chief executive Mr Lawrence Tawuya told Herald Business in an interview that the bank, which had a negative core capital of US$21 million, was now trading positively.
RMB paid off small depositors in the first four months since reopening and is in the process of paying critical institutional customers, such as hospitals and schools, and then eventually clear obligations to corporates in eight to 12 months.
Interest is suspended when a bank is under curatorship.
“The bank’s liquidity is fairly sound, hence its ability to meet commitments made to the depositors,” said Mr Tawuya.
Measures have been put in place to ensure that directors and staff uphold good corporate governance while skills training to refocus staff in customer service is underway.
Former CZI president Dr Joseph Kanyekanye chairs the RMB board.
With a US$63 million liability to depositors and a US$21 million core capital deficit, the National Social Security Authority, a controlling stake shareholder in RMB, was the only investor capable of and willing to salvage the bank.
The collapse of RMB would have had ripple effects in that if developmental institutions owed by RMB had lost their money, they would have increased their risk premium on the country.
This would deprive lines of credit to local banks.
NSSA, a Government institution, was the target of a barrage of criticism for using public funds to bail out the troubled bank.