THE People's Own Savings Bank expects to report a profit in the year to December 31 2013, driven by the realignment of cost and revenue structures in the second half of the year. The performance was however inferior to the US$2,47 million profit achieved in the prior year.
Responding to questions, POSB chief executive Mr Admore Kandlela however said the bank's performance was impeded by the Memorandum of Understanding between the Reserve Bank of Zimbabwe (RBZ) and banks which was cancelled late last year.
"As the bank with the largest customer base in the mass market sector, in the first half of 2013, we were negatively affected by the reduction in bank charges emanating from the MOU between the RBZ and banks, which came into place in January 2014.
"However in the second half of the year, we had managed to re-align our cost and revenue structures, resulting in the bank achieving a profit in that year," he said.
The chief executive also attributed the profit to the bank's transformation into a commercial bank.
"We have run the whole Savings Bank as a Commercial entity delivering both geographical and social aspects while maintaining profitability.
"The record of profit making from 2010-2013 bears testimony to the commercial nature of the entity," he added.
Mr Kandlela said Liquidity and governance challenges faced by other market players had played a pivotal role in attracting depositors that are constantly seeking a safe haven for their funds.
"POSB has been aggressive in deposit mobilisation and business development, mainly focusing on the mass market and middle corporate segments.
"Our brand has stood the test of time (over 108 years), given our stability and proven prudence in business operations. Our current and potential customers recognise that our bank charges are competitive and on the lower quartile of the market.
"We offer tax-free interest on deposits, all deposits with us are fully guaranteed by the government, and our array of products and services has drastically increased in the past three years.
"Liquidity and governance challenges faced by other market players have also benefited POSB as depositors seek a safe haven for their funds," he said.
The chief executive said the bank will also attract depositors by utilising its wide branch network which makes it possible to collaborate on an agency basis with other service providers.
POSB has opened six branches since 2010, and expanded points of presence in its agency, Zimpost Offices to 220, making it the bank with the largest branch and agency network in the country.
"Our strategy in 2014 is to consolidate the branch network, optimise the utilisation of the delivery channels that we now have, and certainly drive more utilisation towards digital/electronic platforms for improved service to our customers," he added.
In line with the drive towards electronic platforms, Mr Kandlela said more than 5 million transactions were done via POSB's Cellphone Banking last year alone.
Shedding light on government's bid to privatise POSB, Mr Kandlela said the bank is yet to find suitable investors to take up stake in the savings bank.
"Government has not found any takers yet for POSB. This is a due process that has to follow due corporate governance procedures.
"The State Enterprise Agency is still dealing with the internal processes of selecting the right advisors," he said.
Looking ahead, the chief executive said POSB will continue supporting Small to Medium Enterprises SME's with 50 percent of the bank's loan book earmarked for the sector.
"The bank's business banking segment has traditionally been skewed towards SMEs and Middle Corporates. As POSB's mandate for the government includes the promotion of financial inclusion and support for economic development, we will ensure that more than at least 50 percent of our loan book is availed to SMEs," he said.
The bank also plans to support innovative business partnerships and develop IT solutions for financial inclusion in the current year.
"Plans for the current year hinge on the political motivation to increase financial inclusion.
To this end, the savings bank intends to provide a wide range of usable financial services, support innovative business partnerships, support financial literacy efforts sponsored by the bank and develop further IT solutions for financial inclusion," he said.