Trustco Bank Namibia has formally exited commercial banking in Namibia.

Trustco Group Holdings, the holding company of Trustco Bank Namibia, took the decision at a meeting earlier this week, where it was resolved to return its banking license to the Bank of Namibia.

Deputy Managing Director of Trustco, Quinton Van Rooyen, has confirmed the decision to cancel its banking license, saying the bank ceased operations about 12 months ago, following a decision by the Bank of Namibia to suspend its license.

The Central Bank announced on August 18, last year, that it resolved to suspend the authorization of Trustco Bank Nambia to operate as a banking institution, with immediate effect, in accordance with the Banking Institutions Act.

Van Rooyen says its investment in its commercial banking portfolio accounts for less than one percent of its total investments, and it was decided to return its banking license to the Bank of Namibia for cancellation, effective immediately. 

He points out that Trustco's focus will now shift to the non-banking industry to take advantage of growth opportunities in that sector, saying the group has full confidence in Namibia.

Van Rooyen says Trusto will now increase its stake in Legal Shield Holdings to take advantage of expected growth in Namibia's insurance and real estate sectors.

Meanwhile, the Bank of Namibia says it has taken note of Trusto Group Holdings decision to discontinue its banking business.

In a statement, the Bank of Namibia referred to its August 2023 decision to suspend the banking license of Trustco Bank, TBN, saying the suspension was temporary and subject to TBN rectifying certain stipulated and communicated instances of non-compliance with the, now repealed, Banking Institutions Act, 1998. 

However, the Central Bank says TBN remained non-compliant with the identified provisions of the Act and the matters that caused its suspension.

That, it said, led to its notice of intention issued on July 29 to cancel TBN's authorization to conduct banking business due to its failure to remediate the suspension conditions.

The Bank of Namibia says it has noted TBN's decision to discontinue its banking business and that the process of winding down TBN has commenced as per the Act.

The Central Bank says it has also taken note of Trustco Group Holding's public statement that depositors' funds are guaranteed and held by the Bank of Namibia, saying this statement is misleading and pointing out that TBN holds depositors' funds and that it remains TBN's responsibility to repay all depositors' funds.

The Bank of Namibia had previously issued a directive to TBN to ringfence depositor funds in a bank account held with a banking institution in Namibia. 

The Central Bank says it has directed TBN to present its deposit repayment plan to the bank on Tuesday, August 27, 2024.