• Investrust Bank’s estimated level of insolvency was K850 million at the time of possession.
• The Central Bank is currently working hard to have the statement of affairs prepared within six weeks.
• BoZ will facilitate initial payment to all depositors up to a maximum of K500, 000, covering 90 percent of the total deposit accounts.

Bank of Zambia (BoZ) has disclosed that Investrust Bank’s estimated level of insolvency was K850 million at the time of possession on 2nd April, 2024, while government has pledged to provide K1 billion fiscal support to pay depositors.

Addressing Journalists in Lusaka today, Bank Governor Dr. Denny Kalyalya however said this is a preliminary position which will be confirmed once the Statement of Affairs is prepared.

Dr. Kalyalya stated that the Central Bank is currently working hard to have the statement of affairs prepared within six weeks from now and to have options prepared for how it will resolve the issues surrounding Investrust Bank in Possession.

He said the Bank’s decision to take over Investrust operations took was arrived at after all other efforts failed to deliver the assurance that the institution could continue as a going concern.

“Over the years, the Bank of Zambia has had several engagements with the major shareholder and constantly emphasized the need for the shareholders to fully recapitalize the bank. In 2019, the major shareholder injected capital in the bank amounting to K286 million.

However, this was not enough to put the bank on a sustainable capital base.”

“Further efforts were made by the major shareholders to resolve the challenges at the bank through a group rationalization transaction in 2020, which would have led to the Industrial Development Corporation (IDC) being the majority shareholder. Unfortunately, this too, did not materialize. As a result, they initiated the process of finding a suitable strategic equity partner, which up to the date of possession, had not yielded positive results,” Dr. Kalyalya explained.

He assured the depositors that their deposits are safe as Government will provide support to bridge the gap between assets and liabilities of the bank in possession.

“I must mention that this fiscal support is critical in the context of the need to protect the integrity of the financial system and to support other key measures to promote growth and financial inclusion including the recent conclusion of the debt restructuring with the Eurobond holders and the measures taken to revive the mining sector,” he assured.

Speaking at the same event, Bank Deputy Governor Dr. Francis Chipimo said the Central Bank will facilitate initial payment to all depositors up to a maximum of K500, 000, covering 90 percent of the total deposit accounts.

Dr. Chipimo, who is also Registrar of Financial Service Provider, explained that this entails that customers who have deposits at or below K500, 000 will get payments that fully cover their deposits during this first payment.

“Bank of Zambia is also working around the clock to ensure that depositors receive part of their deposits in the shortest time possible. You will all appreciate that to do this, the Bank of Zambia needs time to conclude the validation of depositors’ information and we will require the full cooperation and patience of depositors.

Depositors also need sufficient time to provide alternative payment channels to receive the first payments.”

“In this regard, the Bank of Zambia plans to make the first payment by 26 April 2024. Once the Statement of Affairs is concluded, the Bank of Zambia will advise depositors on how they will access the balance of the deposits. Bank of Zambia works on a resolution path which will lead to depositors having full access to their deposits. We would also like to thank and commend the Government for the support and collaboration in this exercise.

He also encouraged customers with outstanding loans to continue serving their loans with Investrust in possession, stating that they will be advised where to make their loan repayments.

On 2nd April, 2024, Bank of Zambia took possession of Investrust Bank PLC due to its insolvency.

ZCCM-IH is the major shareholder of Investrust Bank with 71.4 percent shares, while Bank of Nevis International Ltd has 24.1 percent shares, with other minority shareholders having 4.5 shares.