POSB records HY net profit of $63,69 billion

THE People’s Own Savings Bank (POSB) recorded a net profit of $63,69 billion in the six months ended 30 June 2023 against a budgeted profit of $3,19 billion at a time when its capital adequacy ratio closed 2022 at 62 percent in inflation-adjusted terms against the minimum regulatory ratio of 12 percent.

The high capital adequacy ratio indicates that the financial institution which has more than one million clients, has enough capital on reserve to support its risk-weighted assets.

The net operating income for the period was above budget by 329 percent largely driven by growth in transaction volumes and values.

This was achieved despite the significant increase in the exchange rate from US$1:ZWL 671,45 in December 2022 to US$1:ZWL6 326, 59 in June 2023, the bank said.

Outlining the financial performance update for the Year ended 31 December 2022 and half year ended 30 June 2023, the bank said in inflation-adjusted terms, it recorded a net profit of $2,34 billion in the period under review while in historical terms, net profit recorded was $4,24 billion.

Net operating income for the year grew by 74 percent in inflation adjusted terms to reach $18,99 billion for the year 2022 largely driven by growth in transaction volumes and values during the year under review.

The bank posted a 93 percent increase in operating expenses to $14,6 billion in inflation adjusted terms from $7,56 billion recorded for the year 2021 mainly due to a general rise in prices attributed to inflationary pressures.

Total assets in inflation-adjusted terms increased by 35 percent to $39,37 billion as at 31 December 2022 from $29,06 billion recorded in the prior year.

The Bank maintained a high-quality loan book, closing the year with a non-performing loan (NPL) ratio of 2,48 percent.
Total deposits increased by 33 percent to close the year at $21,29 billion in inflation adjusted terms and by 358 percent in historical terms as the Bank continued to grow its deposit base despite inflationary pressures.

It noted that its liquidity ratio stood at 70 percent as at 31 December 2022 proving that it is highly liquid and has the capacity to honour its obligations.

To that end, the capital adequacy ratio closed the year 2022 at 62 percent in inflation adjusted terms against the minimum regulatory ratio of 12 percent signifying that the Bank has enough capital on reserve to support its risk weighted assets.

Meanwhile, the bank said in the period under review it recorded about 1,1 million customers representing a 1,5 percent increase in the number of customers signing up for accounts.

“The increase can be attributed to the introduction of the Prepaid and Debit Gold MasterCard. The Bank has continued to serve the pensioners through processing of USD allowances and that has increased customer retention in that customer segment.”

POSB said at 39 percent, civil servants comprise the lion’s share of the total salaries processed by the bank.
“A total of ZW$32,1 billion was processed in salaries in June 2023, representing an 81,7 percent increase from the ZW$17,7 billion recorded in March 2023.

“The increase is attributed to general increases in salaries for civil servants, pensioners and the private sector.”
A total of 251 511 Nostro accounts were recorded as at 30 June 2023.
NSSA pensioners contribute the biggest composition of the Bank’s Nostro accounts followed by Government pensioners and civil servants.

In the period under review, to support foreign currency revenue generation, POSB launched USD credit facilities with the aim of providing USD support to all qualifying customers.
As at 30 June 2023 the loan book in USDs amounted to US$8,08 million up from US$2,4 million recorded on 31 December 2022.-chronicls