eBusiness Weekly
Nelson Gahadza
The People’s Own Savings Bank (POSB) partial privatisation which is pencilled for completion by end of this year, is set to turnaround the bank’s prospects through fresh capital injection.
The Government, which wholly owns the bank, plans to partially privatise POSB as part of its deep overhaul of the underperforming public enterprise sector.
Under the reforms, most of the parastatals will either be privatised or capitalised to be able to perform better, and reduce their reliance on state bailouts.
The partial privatisation of the POSB will involve the government offloading a minority stake and the proceeds used, in part, to capitalise the bank.
Although the final mode of privatisation is yet to be determined, it appears the bank is leaning towards a private placement with a strategic investor.
Israel Ndlovu, the group’s chairman, in a statement of the Bank’s financials for the half year ended June 30, 2022, said the partial privatisation process has significantly progressed as the initial phase of the project was completed following the submission of the Due diligence, the Company analysis and the Valuation reports.
“The Final Privatisation Strategy, investor selection criteria and Cabinet Memo on the privatisation project were submitted to the Ministry of Finance and Economic Development for review.
“The transaction advisory consultancy contract, which had been extended to June 30, 2022 is currently being reviewed for a further extension given that the project is likely to be completed by end of the year 2022,” he said.
POSB has been in the market for potential suitors for some time now as part of the 15 parastatals earmarked for privatisation under different models by the government.
Other parastatals up for privatisation include perennial lossmaking flag carrier Air Zimbabwe, Agribank, TelOne and NetOne.
POSB is a financial services provider that is wholly owned by the Government of Zimbabwe, which was established in terms of the People’s Own Savings Bank of Zimbabwe Act of 1999. The bank serves around 400,000 retail and corporate customers by offering them individual, corporate, mortgage, SME and agribusiness, and microfinance loans.
During the half year period under review, the bank in historical adjusted terms, posted a net profit of $1,66 billion up from $347,30 million in the comparative prior period.
However, in inflation adjusted terms, the bank recorded a loss of $2,02 billion from a profit of $109,98 million in the first six months of 2021.
In inflation adjusted terms, net operating income for the period increased by 67 percent to $5,70 billion from $3,42 billion achieved in the comparative period.
Ndlovu said that the bank’s credit quality of the loan book remained satisfactory as the non-performing loans ratio closed the half year 2022 at 0,99 percent.
He said the bank’s liquidity ratio was maintained well above the regulatory minimum of 30 percent closing the period under review at 72 percent. Total shareholders’ equity closed the period at $8,13 billion up from $7,04 billion recorded as at December 31, 2021.
“The Bank remains well capitalised and has exceeded the Tier 2 capital threshold of US$20 million prescribed for commercial banks,” said Ndlovu.
He noted that the board is optimistic that the performance of the bank will remain satisfactory in the second half of the year 2022 as the bank continues to grow its customer base and introduce new and innovative products in line with its mandate of promoting financial inclusion.
During the period under review, the bank had various developments that include widening the agency banking scope and will continue to do so through partnering with different money transfer agencies.
“In January 2022, the bank launched Mama Money to facilitate receipt of remittance sent from South Africa and this has enhanced customer convenience for those receiving remittances from the neighbouring country,” said Ndlovu.
He added that in July 2022, the bank launched POSB Remit, its own local USD transfer service to allow for local funds transfer.
During the period under review, the bank also launched the USD credit facility to qualifying customers.
