Golden Sibanda
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.
This progress was arguably unthinkable for a bank that had US$63 million deposits spread over diverse portfolios, but with a whopping US$47 million of the loans not earning interest.

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.
Mr Tawuya said the depositors were or would be paid their capital amount, plus an annual interest of 10 percent from the time the bank’s curatorship period expired.

Interest is suspended when a bank is under curatorship.
“All these actions demonstrate the capacity the bank has built to restore it to a sound and solid institution,” he said.
“A positive development has been the recovery process of non-performing loans. Management is working tirelessly to recover non-performing loans and progress has been encouraging

“The bank’s liquidity is fairly sound, hence its ability to meet commitments made to the depositors,” said Mr Tawuya.
RMB has made arrangements with international creditors, PTA Bank and Norsad, to restitute a combined US$13 million credit line.
Mr Tawuya said RMB’s fast-changing fortunes were manifested in the last four months when the bank handled a number of transactions in advisory, working capital and trade finance support to meet the new requirements of its clients.

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.
RMB ran into problems last year when acts of financial impropriety were unearthed by a Reserve Bank of Zimbabwe team after a dispute over a loan Renaissance Financial Holdings founder Mr Patterson Timba had failed to repay.

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’s investment also prevented the contagion effect of RMB’s collapse on the companies and their workers who themselves are key contributors to the authorities revenue inflows.

NSSA, a Government institution, was the target of a barrage of criticism for using public funds to bail out the troubled bank.