POSB IPO plans on course
The People’s Own Savings Bank (POSB) is proceeding with its plan to partially privatise its operations via an Initial Public Offering (IPO) on the local stock exchange.
Acting board chairperson Israel Ndlovu said in the firm’s full year results said, “The final privatisation strategy was subsequently presented and approved by the board and the technical committee in February 2022.”
He also noted that once the board had identified the correct partner to partially privatise with, it would then send the proposals to Cabinet for approval.
“In light of this development, it is reasonable to anticipate that the identification of the ideal investors and proposals for the listing of the bank on the stock exchange will be ready for approval by Cabinet in the second half of 2022,” said Mr Ndlovu.
The listing initiative is meant to rid the State Owned Enterprise (SOE) of operational inefficiencies and give it leverage to access more funding to recapitalise operations.
Listing on the ZSE will likely create value for prospective investors, position the bank to compete better against other players and allow a certain degree of decision-making independence toward profitability.
POSB has been in the market for potential suitors for some time and is one of 15 parastatals earmarked for privatisation under different models by the Government.
Other parastatals up for privatisation include perennial loss-making flag carrier Air Zimbabwe, Agribank, TelOne and NetOne.
In terms of financial performance, POSB recorded a profit of $721,98 million in inflation adjusted terms in 2021 from a loss of $699 million in the previous financial period.
Net operating income for the year increased by 56 percent to $3,18 billion in inflation adjusted terms due to below inflation yields on financial assets, which declined by 17 percent to reach $1,267 billion for the year 2020.
In the period under review, operating expenses increased by 73 percent to $2,2 billion in 2021 from $1,27 billion in 2020, reflecting management’s commitment to cushion employees against rising cost of living.
Tight controls saw the bank’s non-performing loans ratio improving significantly from 0,94 percent as at December 31 2021 to 0,85 percent as at December 31 2021.
This demonstrated the continuous improvement in the quality of the Bank’s loan book. “The core capital of the bank in historic terms was $2,97 billion which is equivalent to US$21,7 million as at December 31, 2021. Thus, the bank is adequately capitalised when benchmarked against the Tier II regulatory capital threshold of US$20 million,” Mr Ndlovusaid.
POSB is a financial services provider that is wholly owned by the Government of Zimbabwe. It 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 & agribusiness, and microfinance loans.
According to the Reserve Bank of Zimbabwe’s banking sector reports, the size of POSB’s
loan book represents roughly 1,2 percent of the local banking sector’s loan book.-The Herald
