Table of Contents
Key Points
- Trustco Group Holdings has surrendered its banking license and exited the banking sector to focus on other financial services.
- Trustco Bank Namibia failed to address compliance issues outlined by the Bank of Namibia, leading to its license cancellation.
- Trustco plans to move its business towards non-deposit-taking financial services, aiming to capitalize on growth opportunities.
Namibian tycoon Quinton van Rooyen’s Trustco Group Holdings has made the decision to surrender its banking license and exit the banking sector altogether.
According to a statement from the Bank of Namibia (BoN) spokesperson, Kazembire Zemburuka, on Friday, the central bank canceled the banking license of Trustco Bank Namibia (TBN) and instructed the bank to submit its plan for repaying depositors by Tuesday, August 27.
This development begins a turning point for Trustco, which has chosen to refocus its business away from banking.
Trustco’s moves away from banking
Trustco confirmed the license surrender on its website, revealing that its banking operations accounted for less than 1% of the company’s total investments.
Quinton van Rooyen, the chairman of the board investment committee at Trustco Group Holdings, explained the rationale behind this 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,” Van Rooyen stated.
The decision follows a series of regulatory challenges for TBN. In August 2023, the BoN temporarily suspended TBN’s authorization to operate as a banking institution. This suspension was contingent on TBN rectifying specific instances of non-compliance with the Banking Institutions Act.
However, by the end of the suspension period, TBN had not addressed these compliance issues, prompting the BoN to issue a notice on July 29 of its intention to cancel TBN’s banking license.
Regulatory challenges and compliance issues
Despite being given the opportunity to present its case against the cancellation, TBN did not make any representations. Instead, it communicated its decision to discontinue its banking business to the central bank.
Zemburuka noted that the BoN has carefully observed Trustco Group Holdings’ public assertion that depositors’ funds are safeguarded and held by the Bank of Namibia. However, he clarified that this statement is misleading.
“The Bank of Namibia reiterates that TBN holds depositors’ funds, and it remains TBN’s responsibility to repay all depositors’ funds,” he said.
The BoN previously issued a directive to TBN to protect depositor funds by holding them in a bank account with a recognized banking institution in Namibia. Despite this directive, the issues of non-compliance and the subsequent regulatory actions have culminated in TBN’s exit from the banking sector.
Trustco Group, based in Windhoek, operates across banking, insurance, property, and wealth management sectors. The company boasts a robust investment portfolio with a well-balanced asset allocation. On average, 34 percent of Trustco’s assets are denominated in U.S. dollars, with the remaining 66 percent invested in Namibian dollars.
The van Rooyen family holds a major 63.94-percent ownership stake in Trustco, representing 1,004,000,060 ordinary shares, solidifying Quinton van Rooyen’s position as one of Namibia’s wealthiest individuals.
