The People’s Own Savings Bank is set to receive US$25 million from the Deposit Protection Corporation for compensation of account holders who incurred losses when the exchange rate shifted from US$1: $1 to $2,50 in 2019.
Finance and Economic Development Minister, Professor Mthuli Ncube, announced the compensation framework in the 2021 national budget.
The compensation scheme is administered by the DPC using funds provided by the Government through Kuvimba Mining House for distribution to vulnerable depositors including pensioners.
Responding to question on what POSB was doing to address the long queues at its branches dotted across the country from the director for financial and capital markets in the Ministry of Finance and Economic Development Mrs Judith Rusike, who represented Finance Minister Professor Mthuli Ncube at the bank’s Annual General Meeting in Harare on Tuesday, the institution’s chief executive officer Admore Kandlela (pictured right) said:
“In fact, another very huge aspect that we are going to ponder over is DPC has since actually nominated us as the next bank after the microfinance deposit-taking institution, we are going to be transferred about US$25 million and we expect some of these pensioners to benefit.
“Now with POSB Remit, we say how can we get this money back to them on their platforms, . . . our strategy is to actually accommodate them.
“They (pensioners) love to visit the branch, now you push them to digital channels giving them their cards and all that, but you still find they want to come back to the branches.”
He said this was not only because of their liking but the nature of new products that are coming up like giving them that US$ portion.
Kandlela who is set to retire on October 31, 2022 from the bank after close to two decades at the helm of the financial institution, said the long queues being experienced at POSB branches across the country were mostly on pay days.
He said the institution has increased its branch network to 132.
“We are quite aware of that (queues) and you see from the statistics that I was given, you will notice the 61 to above 61 years’ age group, which are mostly our pensioners, are the largest portion of our market.
“Sooner or later, you will find the 40s age group overtaking these people, which shows the shift to the digital aspect.
“What we are trying to do is to move them also away from the branches into their e-channels and with ZimPost, which was our major agent; we had a challenge because of the use of the manual figures I think about three years back and we have since improved on this.”
In the half year ended June 30, 2022, the bank’s balance sheet increased by 130 percent to $18,9 billion from $8,2 billion as at the end of December 2021.
During the period under review, the POSB recorded core capital amounting to $7,75 billion which at the time, if converted to hard currency it was US$21,15 million an indication that the bank was adequately capitalised when bench-marked against Tier 2 capital for commercial banks.
This entails that the POSB’s capital was strong, providing financial resources to support its clients as well as fund the bank’s growth aspirations.
“Even the loans that NSSA (National Social Security Authority) gave us to administer to them and the repayment performance was excellent and they have repaid all the monies not until the interest rates will change to 100 percent.
For the six months up to the end of June 2022, in historical terms, the bank achieved a net profit of $1,6 billion up from the $347 million that was achieved in 2021.
At the AGM, stakeholders passed all the resolutions including the gratuity proposed to be paid to Kandlela.
Among others, the AGM also resolved the adoption of the financial statements and the report of the directors and auditors for the year ended December 31, 2021; approved the payment of a dividend of $3 per share to the shareholder for the year under review as well approve the remuneration of the external auditors for the period ended December 31, 2021 totalling $11,7 million.
Last year, POSB was able to generate income totalling $721 million after adjusting the accounts for inflation. As at December 31, 2021, POSB’s asset portfolio increased by 65 percent to $$8,4 billion from $5,1 billion in 2020 and this was attributed to the institution’s ability to mobilise deposits during the period under review. In the year under review, the bank’s financial assets increased by 69 percent to $2,28 billion from $1,35 billion in 2020.