Govt blitz stalls POSB restructuring

POSB-Zimbabwe.jpg

RESTRUCTURING of the state-owned institution, People’s Own Savings Bank (POSB), has been stalled by unavailability of capital and government’s blitz on parastatal bosses’ hefty salaries and perks, businessdigest has learnt.

Taurai Mangudhla

Privatisation of POSB, expected to result in the formation of a new commercial unit, has been delayed by the unavailability of capital locally and a general wait-and-see attitude among international investors due to the country’s unfriendly investment policies like the Indigenisation Act.

Highly placed sources in the bank say Grant Thornton Camelsa were this year appointed technical advisors for the processes, but progress halted soon after due to the ongoing government audit on CEO salaries and packages.

The process involves collection of raw data from the parastatals which is to be followed by a full audit and is apparently swamping the Comptroller and Auditor General (CAG)’s office.

Last month, Finance minister Patrick Chinamasa said the audit would be a lot of work and would need the appointment of independent auditors under the auspices of the CAG.

Chinamasa cut monthly salaries and benefits for parastatals and local authorities’ executives to a combined maximum US$6 000 pending finalisation of an audit process that will guide cabinet in coming up with a comprehensive salary structure for the state enterprises.

POSB CEO Admore Kandlela, according to the initial submissions, earned US$20 400 in basic salary and benefits per month.

Efforts to get an official comment from Kandlela were fruitless as he was out of office. POSB general manager Elisha Chibvuri could also not be reached for comment at the time of going to print as his office line went unanswered.

Government approved the restructuring of POSB in December 2013 with a thrust to raise fresh capital, improve liquidity of the bank and lines of credit, while maintaining indigenous majority shareholding.

In the long run, possible listing of the bank on the Zimbabwe Stock Exchange has been explored.

According to reports, government wants POSB to widen frontiers of financial inclusion by partnering international development agencies, generate resources for productive lending and access expertise from from a strategic partner.

Early 2013, insiders indicated the privatisation of POSB would be no stroll in the park as investors fret over political and economic uncertainty and the tedious bureaucracy when dealing with government.

At the time, sources said, they had been no foreign interest in the state owned bank, leaving government with no choice but to look internally.

The coming in on board of a new technical partner and capital could go a long way in turning around the bank after reporting a US$209 365 loss after tax for the year ended December 31, 2013 compared to a US$2,5 million after tax profit performance in the prior year.

The bank said the loss was a result of a Memorandum of Understanding with the Reserve Bank of Zimbabwe to put a cap on bank charges and fees. POSB’s retail banking fees and income declined to US$13 million from US$14,4 million in 2012.

Kandlela said the bank lost a lot of income under the MoU as it could not charge fees to pensioners over 60 years of age.

“This had a great impact as the bank serves the largest community of pensioners countrywide,” Kandlela said in a statement.

“Furthermore, the bank had to increase its provisions for impairment losses in order to cover its exposures and this undoubtedly had had significant impact on its financial performance.”

According to the bank’s financials, increase in impairment loses on loans and advances stood at US$3 million, up from US$728 500 prior year as account default on loans due to illiquidity and a general economic meltdown that has seen companies close and individuals lose their jobs.

Total income for the year also declined by 15% from US$22,7 million in 2013 to US$19,2 million in the year under review due to the MoU which saw a decline in service charges and lending rates.

Total expenses slid 4% due to a cost cutting exercise.

Deposits grew 13% to US$72,2 million while total assets grew by 12% to US$90 million.

Kandlela said the bank added two branches to its stable in 2013, one in Mbare and another one in Mvuma to bring convenience to its customers.

One thought on “Govt blitz stalls POSB restructuring”

  1. saturday says:

    As it stands it’s only parastatal bosses and gvt officials who have been earning $thousands who shld invest beacuse they have the cash. Oh wait they don’t want to invest in zim because they know it’s like donating money to parastatal bosses and gvt officials.
    Forget fresh capital no one is dumb enough to invest in zim other than your Chinese crooks because they are also corrupt like your parastatal bosses and gvt officials.

Comments are closed.

Top