POSB performance impressive: Chinamasa

HARARE - Finance minister Patrick Chinamasa says government is happy with the performance of State-owned People Own Savings Bank (POSB), which registered a $7,9 million profit in the full year to December 2015.

Addressing the bank’s board and management at an annual general meeting held in the capital yesterday, Chinamasa said other parastatals must emulate POSB and start making profits to avoid draining the fiscus.

“POSB is a good example of financial inclusion through its huge depositor base and there is no bank in Zimbabwe which boasts of extensive branch network,” he said, adding that the financial institution must utilise its assets as a basis for growth.

The bank, which is 100 percent owned by government, held its second annual general meeting in four years as it strives to realign its operations with international best practices following the appointment of a new board last year.

Chinamasa noted that it was in the bank’s interest to provide more funding to the productive sectors of the economy as opposed to relying on consumptive lending.

This comes as POSB — one of the best performing parastatals in the country which has consistently declared dividend to government — has a high loan to deposit ratio of 76 percent against an industry average of 70 percent.

The bank’s chief executive Admore Kandlela said the financial institution has been growing its asset base since 2009 and was putting in place measures to remain profitable in the long-term.

“We registered $1,6 million profit in the first quarter and we continue to craft our financial inclusion strategy in line with the Reserve Bank of Zimbabwe’s 2020 targets,” he said.

Government last year injected $12,8 million into POSB in the form of 10-year Treasury Bills (TBs) with a $20 million maturing value, a development which enhanced the bank’s capital position which saw the capital adequacy position improve from 12,8 percent in 2014 to 22,2 percent at the end of 2015.

The TBs were issued on November 30, 2015 at 0,00001 percent and re-issued at one percent on February 26, 2016, which interest is payable on maturity.

The bills — redeemable in 2025 — were accounted for at their fair value using a discount rate of five percent which is the discount rate used for similar financial instruments issued on the market.

Kandlela said the bank intended to leverage on the stronger balance sheet to write more business going forward.

In the full year to December 2015, the bank’s net operating income surged 37 percent to $32,9 million as a net impairment recovery of $1,3 million was recorded during the period under review compared to $3 million prior year.

Comments (1)

POSB SHOULD DO VERY WELL AFTER ALL THEY HAVE STOLEN MILLIONS OF MY DOLLARS.

jack - 18 May 2016

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