18 January 2013

Zimbabwe: Government Restructures POSB

PEOPLE'S Own Savings Bank (POSB) is headed for a fresh start after the government recently approved restructuring proposals that will transform its shareholding structure and lead to the possible listing of the bank on the Zimbabwe Stock Exchange, a cabinet official said.

In an exclusive interview with businessdigest this week, State Enterprises and Parastatals minister Gorden Moyo said government approval had been granted for a restructuring of the bank and its listing.

"Three key issues that need to be addressed are firstly that the POSB's original mandate of serving the grassroots people needs to be retained. There is need for the country to have a bank that specifically caters for the marginalised sectors of the economy, particularly the rural-based population. POSB's infrastructure and distribution network has that reach. And that needs to be preserved," Moyo said.

"Secondly, there was a proposal to introduce a commercial unit within POSB that will very be competitive. This unit will aggressively engage with other big banks in competing in the same space with them. To this end, POSB will need to capacitated through an injection of capital and additional skills."

He said this would necessitate the creation of a joint venture with an appropriate local, regional or international partner.

"To this end, the agreed position is that government is prepared to relinquish 49% shareholding in POSB to such an identified partner," Moyo said.

"Government would need to amend the POSB Act to align with the new strategic thinking," he added

Detailed documents on the proposed plan, seen by businessdigest, show the decision to engage a strategic partner after amending the POSB Act. Officials preparing the restructuring memorandum made several recommendations with four options:

"These options entail invoking Section 25 subsection (3) of the POSB Act which provides for equity participation of up to 49% by the private players in POSB. This would mean that POSB's mandate would remain unchanged and also the current corporate tax and statutory reserves exemptions would still apply.

In this regard, it is recommended that the criteria for engaging a suitable strategic partner should be biased towards the developmental and social aspects of POSB mandates," read part of the documents.

The minister however emphasised in order to attract a suitable partner who is able to promote the current POSB mandate, several sections of the current POSB Act had to be amended.

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