POSB partial privatisation put on halt

THE planned partial privatisation of the People’s Own Savings Bank (POSB) has been put on halt as the bank awaits further guidance on the project from the shareholder.

Partial privatisation was set to be completed by the end of 2023.

The Government, which wholly owns the bank, plans to partially privatise POSB as part of its extensive overhaul of the under-performing 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 is expected to involve the Government offloading a minority stake and using the proceeds, in part, to capitalise the bank.

In its financial results for the year ended December 31, 2023, the bank said, “The commercialisation of POSB that commenced in 2001 was on a gradual rollout until its suspension by the shareholder at the partial privatisation stage in 2023.

“At the time of its suspension, the project was pending implementation of outstanding work-streams, including the procurement of prospective investors with all deliverables to complete the IPO processes having been moved to the year 2024. The Bank awaits further guidance on the project from the shareholder.”

Last year, in a notice seeking expressions of interest, the bank said: “The Government of Zimbabwe intends to engage a strategic investor in partial privatisation of the People’s Own Savings Bank, a savings bank licensed and supervised by the Reserve Bank of Zimbabwe, by offering up to 29 percent available shareholding through the private placement of the Bank’s equity share capital.

“The private placement will be followed by an initial public offering (IPO) of up to 20 percent shareholding of the Bank, to diversify the shareholder base and improve the liquidity of the shares.

“Accordingly, the Government of Zimbabwe will hold 51 percent equity stake post the partial privatisation, as provided in the People’s Own Savings Bank Act,” reads part of the notice.

Interested parties had up to October 13, 2023, to submit documents. KPMG Advisory Private Limited were the financial transaction advisors for the engagement of a strategic investor.

POSB has been in the market for potential suitors for some time, as part of the 15 parastatals earmarked for privatisation under different models by the Government.

Other parastatals designated for privatisation include perennial loss-making national carrier Air Zimbabwe, Agribank, TelOne and NetOne.

POSB is a financial services provider that is wholly owned by the Government of Zimbabwe and was established in terms of the People’s Own Savings Bank of Zimbabwe Act of 1999.

Meanwhile, the bank’s chief executive officer, Mr Garainashe Changunda said the financial institution recorded a net profit of $97,35 billion in historical terms compared to a net profit of $4,24 billion in the prior year.

“In inflation-adjusted terms, the Bank recorded a net profit of $110,16 billion compared to a net profit of $11,27 billion in 2022. In historical terms, net operating income increased by 1 336 percent to $215,21 billion from $14,99 billion in the prior year whilst in inflation-adjusted terms, a 345 percent increase in net operating income was recorded from $91,43 billion in the year 2022 to $407,04 billion in the year 2023.

“This reflects positive business growth despite the inflationary pressures.”-chronicle