HARARE – The Government of Zimbabwe has accelerated a plan to relinquish part of its shareholding in the wholly owned mass market banking giant, POSB Bank, after appointing a technical committee to lead the process.
POSB said last week that subsequent to the appointment, the Ministry of Finance had floated a tender to draft in technical advisors for the programme that government wants concluded before the end of this year.
Privatisation of POSB is expected to transform one of Zimbabwe’s oldest banks into a robust and efficient financial institution with capacity to respond to industry’s funding requirements, bankroll critical projects and improve financial inclusion.
Ahead of the transformation, chief executive officer, Edmore Kandlela appeared to be dressing up POSB into an attractive asset for suitors.
The bank achieved a 16 percent growth in deposits to $185 million during the review period, from $159 million during the same period in 2017.
Net profit during the review period rose to $16,89 million, from $11,36 million during the prior comparable period in 2017, tracking net operating income, which increased by 18 percent to $44,51 million from $37,60 million.
POSB’s financial results showed significant effort towards containing impairments, which decreased by 34 percent to $0,56 million from $0,86 million in 2017.
Total assets grew by 19 percent to $269 million, from $227 million during the same period the previous year.
The bank said operating expenses rose by five percent to $27,62 million from $26,24 million the previous year, while the cost to income ration decreased to 62 percent, from 70 percent during the prior comparable period.
“The groundwork to ensure implementation is being spearheaded by the Ministry of Finance and Economic Development which subsequently appointed a technical committee to coordinate the process, POSB said in a statement accompanying the financial results.
“The tender for technical advisors has been floated and adjudication of the same is underway. Going forward, the bank will continue to maintain its focus on delivering quality, accessible and affordable financial services to its customers whilst at the same time progressing the mandate of ensuring financial inclusion in Zimbabwe. The outlook for POSB looks promising as implementation of the government’s decision to partially privatise the bank through private placement and or initial public offer gathers momentum.”
“This is expected to enhance the bank’s capacity to underwrite more business to the productive sectors of the economy, widen the frontiers of financial inclusion and improve access by the bank to State of the art technology in order to improve operating efficiency,” said POSB.
POSB has been the subject of privatisation plans for many years.
But each time debate over the plan heated, government would suddenly backtrack.
However, under a plan published by Finance Minister Mthuli Ncube in October 2018, Zimbabwe’s government appears determined let go.
POSB closed the year ended December 31, 2018 with $70 million capital, $30 million shy of the $100 million minimum capital set by the Reserve Bank of Zimbabwe to be attained by 2020.
“Under the Transitional Stabilisation Programme, government has decided that POSB can meaningfully contribute towards the revival of Zimbabwe’s economic fortunes if it is partially privatised. Government ultimately earmarked the bank for partial privatisation by the end of the fourth quarter in 2019. The bank’s business model will be anchored on its desire to be a future ready digital bank. This target platform requires an end to end transformation of information technology and digital channels. The bank has already completed a business process re-engineering exercise and the process has laid the foundation for the future of POSB. The underlying objective of the new model is that the bank will use technology to achieve a low cost and distinctive competitive advantage in the market,” said POSB.