ZABG Bank enters a new era as the Reserve Bank of Zimbabwe has approved its name change to Allied Bank. The name change is in line with the ongoing rebranding of the recently recapitalised bank, which was on the brink of collapse before the intervention by Trebor & Khays earlier this year.
The investment company, linked to Mines and Mining Development Minister Obert Mpofu, injected US$22,5 million for a 99,5 percent stake in the bank.
ZABG Bank chairman, prominent lawyer Mr Farai Mutamangira, told Herald Business yesterday that the bank could not continue operating to market expectations under the old name.
"We realised that the current ZABG brand could not carry us and we have now gone out of our way to position ourselves to respond to the market expectations. The bank is now in a stronger position than before to negotiate more meaningful deals," he said.
Mr Mutamangira said the RBZ gave the nod to the name change in line with the rebranding.
The Zimbabwe Allied Banking Group was born as a buffer to the banking crisis that shook the country in 2003-2004.
The merger of the three banks Trust, Royal and Barbican was proposed by the RBZ to stabilise the financial sector after they had run into problems.
Following the merger, the major shareholders embarked on a series of court actions challenging the move.
In 2006 the Supreme Court ruled that the sale of Royal and Trust Bank assets was null and void, against which the RBZ appealed.
Retired High Court judge Justice George Smith ruled that the transfer of assets into ZABG was done according to the law. But the shareholders pushed for the return of the assets in line with the Supreme Court ruling.
In 2010 ZABG demerged into Trust, Royal, Barbican and ZABG banks.
ZABG Bank was left exposed with a negative capital of US$15,35 million and efforts to attract foreign investors to rescue the bank were in vain until the intervention by Trebo & Khays.
The bank was also under pressure to comply with the US$12,5 million minimum capital requirements set by the RBZ. Thresholds were later revised to US$100 million by June 2014, which the new ZABG board said was within reach.