By Melody Chikono
People’s Own Savings Bank (POSB) is confident it will close the year within a non-performing loan (NPL) ratio of 5%, a company official said.
POSB chief executive Admore Kandhlela told shareholders at an annual shareholders meeting on Wednesday the bank was now managing a clean book.
POSB NPL ratio declined to 7% in 2017 from 17% in 2016 despite a 28% increase in the loan book at US$85 million as at 31 December 2017. Amid a looming credit crisis, the central bank created a special purpose vehicle, Zimbabwe Asset Management Company, to assume bad debts.
Kandhlela said re-capitalisation efforts would continue in order to achieve US$100 million by the year 2020.
“The bank’s loan book increased by 28% from US$66,78 million as at 31 December 2016 to US$85,4 million as at 31 December 2017. The bank is now managing a cleaner loan book considering that the non-performing loans ratio declined from 17% in 2016 to 7,08% in 2017. Management is confident that the bank will achieve the set target of 5% by 31 December 2018,” he said.
He added that the bank’s capital adequacy ratio which surged by 209 basis points to 33,09% as at 31 December 2017 from 31% as at 31 December 2016 was indicative of the long-term stability and scope for growth of the bank’s business
Kandhlela said the bank would use retained profits to upgrade its servers as part of the bank’s efforts to enhance service delivery to its customers. The bank is also on course to roll out cheaper point of sale devices in line with its drive to promote electronic payments and financial inclusion in Zimbabwe.
“We will continue to leverage on technology platforms to accelerate digital strategy and low cost competitive advantage . . . continue with the cautious approach to lending and aggressively collect outstanding loans,” he said.