POSB projects year-end conclusion of partial privatisation

The People’s Own Savings Bank (POSB) projects to conclude its partial privatisation drive by year-end in a development expected to turn around the bank’s prospects through fresh capital injection.

The Government, which wholly owns the bank, plans to partially privatise POSB as part of efforts to overhaul State entities.

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.

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.

In a statement accompanying the financial results for year ended 31 December, acting group chairman, Mr Israel Ndlovu said consultants engaged to provide transactional advisory services on the Partial Privatisation project, KPMG Advisory Services are in the process of attending to the outstanding workstreams and deliverables requested by the Ministry of Finance and Economic Development.

He said a final Partial Privatisation strategy document was submitted to the Minister of Finance and Economic Development in April last year.

However, the ministry requested additional documentation.

“The Bank is one of the State entities earmarked by the Government for partial privatisation. The consultants engaged to provide transactional advisory services on the Partial Privatisation project, KPMG Advisory Services (Zimbabwe), presented the final Partial Privatisation strategy document which was submitted to the Minister of Finance and Economic Development in April 2022.

Minister of Finance and Economic Development, Prof Mthuli Ncube

“Subsequent to that submission, the Minister requested for a more comprehensive strategy document which is inclusive of the recommended strategic partner or investor.

“At the time of preparing this report, the consultants were in the process of attending to the outstanding workstreams and deliverables which include the Minister’s request.

It is anticipated that the partial privatisation project will be concluded by the end of the year 2023,” said Mr Ndlovu.

During the period under review, in inflation adjusted terms, the bank recorded a profit of ZWL2,34 billion while in historical terms it recorded a net profit of ZWL4,24 billion.

Net operating income for the year increased by 74 percent in inflation adjusted terms to reach ZWL18,99 billion for the year 2022 due to above inflation yields on financial assets.

However, operating expenses increased by 93 percent in inflation adjusted terms to ZWL14,60 billion in 2022 from ZWL7,56 billion in 2021 due to a general rise in prices attributed to inflationary pressures.

In inflation adjusted terms, total assets increased by 35 percent to ZWL39,37 billion as at 31 December 2022 from ZWL29,06 billion in 2021.

Capital adequacy stood at 62 percent as at 31 December 2022 in inflation adjusted terms against the minimum regulatory ratio of 12 percent.

Going forward, Mr Ndlovu said the bank will strive to strengthen its position in the market by growing its customer base and introducing new products.. Already, POSB in partnership with MasterCard has unveiled new prepaid and debit cards that will enable customers to transact on both the domestic and international markets.

The MasterCard debit card will be used by POSB account holders to transact in United States dollars on the international or local front, as well as in Zimbabwe dollars.

The prepaid MasterCard card is intended for customers seeking local and international foreign payment solutions, whether they hold a POSB account or not.

The Bank will also continue to be aggressive in deposit mobilisation in order to grow its business and remain competitive.
Mr Ndlovu added that in an effort to bring convenience and provide efficient services to its customers, the Bank will use its wide branch network, digital channels and agencies to ensure delivery of quality services to its customers.-chronicle