FINANCE and Economic Development minister Mthuli Ncube has granted the State-run mass-market lender People’s Own Savings Bank (POSB) permission to engage potential investors as its privatisation roadmap nears completion.
In a business performance update for the year ended December 31, 2022 and June 30, 2023, the firm revealed that the partial privatisation consultants had submitted a draft call for expression of interest.
“Guidance regarding the privatisation strategy was formally provided by the Minister of Finance and Economic Development; in that regard ministerial approval to engage potential investors was granted,” the bank said on Tuesday.
“The bank is expected to raise US$10 million through IPO [initial public offering] and private placement. To date, the partial privatisation consultants have submitted a draft call for expression of nterest which is currently being reviewed before publication.”
It added: “The consultants contract was extended to March 31, 2024 in order to allow completion of all outstanding workstreams. We are open to offers from like-minded investors, who can help drive our vision for the bank to offer numerous banking services through digital channels.”
POSB is one of 107 State entities earmarked for partial or full privatisation, in a strategy that authorities say will help it attract fresh capital.
Pursuant to privatisation, POSB plans to list on the Zimbabwe Stock Exchange.
In the period under review, the bank progressed the development of 148 residential stands in Barrington valued at US$2,5 million.
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It also invested in share portfolio valued at $10 billion as at June 30, 2023 and raised US$2,5 million to support companies in the economy’s productive sector.
To support foreign currency revenue generation, the bank has also launched United States dollar credit facilities to help provide United States dollar support to all qualifying customers.
Targeted segments within the individuals, farmers, corporates, small-to-medium enterprises and the mining sector space with access to United States dollar-based earnings are eligible.
A competitive 12% per annum interest rate is charged on the facility and will enable the bank to increase its foreign currency revenue through increased interest income.
As at June 30, 2023, the loan book in United States dollars amounted to US$8,08 million, up from US$2,4 million recorded on December 31, 2022.
During the six months ended June 30, 2023 , the bank generated income averaging US$1,4 million monthly from a monthly average of US$305 000 monthly generated during the year 2022.
POSB declared a dividend of $115 million for the year 2022 after generating approximately 50% revenue in foreign currency as it sought to future proof the bank’s balance sheet.
The bank recorded a net profit of $63,69 billion during the six months ended June 30, 2023 against a budgeted profit of $3,19 billion.
Net operating income for the period was above budget by 329% largely driven by growth in transaction volumes and values despite the significant increase in the exchange rate from US$1:$671,45 in December 2022 to US$1:$6 326,59 in June 2023.
Operating expenses were above budget by 53% despite implementation of cost containment measures.
The increase was mainly attributed to a general rise in prices brought about by inflationary pressures.
