POSB gets Cabinet nod to list on ZSE

Source: POSB gets Cabinet nod to list on ZSE | Herald (Business)

Mr Kandlela

Business Reporter

POSB expects the proposal for the listing of the Bank on the stock exchange to be finalised and ready for consideration by Cabinet in the second half of the year 2021, company executives revealed.

The bank is also expecting the identification of ideal investors to be finalised and put before Cabinet during the same period.

POSB is one of the state entities earmarked by the Government for partial privatisation.

In line with the privatisation plan, the bank’s transactional advisors KPMG Advisory Services (Zimbabwe) has already issued the final Inception Report which was subsequently approved and adopted by the Technical Committee (TC).

The draft due diligence and valuation reports have since been presented to the Technical Committee for consideration, according to acting board chairperson, Mr Israel Ndlovu.

“It is anticipated that the identification of the ideal investors and proposals for the listing of the Bank on the stock exchange will be finalised and ready for consideration by Cabinet in the second half of the year 2021,” said Mr Ndlovu.

Meanwhile, reduced income and a monetary loss saw POSB make a loss of $435 million in inflation-adjusted terms for the year to December 2021, the government-owned bank has revealed in its 2020 Annual Report.

The loss is; however, lower than the $600 million loss recorded prior year comparative.

The period under review saw the bank’s interest income drop by 36 percent to $218 million. 

Fair value gain on investment properties was also significantly lower down 61 percent to $107 million.

Net operating income for the year declined by 17 percent in inflation-adjusted terms to reach $1,267 billion for the year 2020 due to below-inflation yields on financial assets.

The only significant income growth was recorded under fees and commission up 48 percent to $987 million.

Non-performing loans ratio also improved significantly, from 5 percent as at   December 31, 2019 to 0,94 percent as at December 31, 2020.

According to the Bank, this demonstrated a significant improvement in the quality of the Bank’s loan book.

While POSB was still $491 million profitable at operating level, a monetary loss of $926 million dragged the Bank into a loss position of $435 million.

Ndhlovu said the loss reported by the Bank in inflation adjusted terms “reflects the impact of hyperinflation on monetary assets which constituted a significant portion of its balance sheet considering the nature of the business of the Bank”.

In other metrics, POSB’s balance sheet size increased by 10.81 percent from $2,879 billion in 2019 to $3,190 billion in 2020.

This was mainly attributed to an increase in deposits by 16,02 percent after taking into account the effects of inflation, according to chief executive Mr Admire Kandlela.

Mr Kandlela, however, described the year 2020 as “very challenging from a macro-economic and business perspective,” amid the Covid-19 outbreak.  ebusinessweekly.

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