THE People’s Own Savings Bank (POSB)’s chairperson Mathilda Dzumbunu says the bank’s partial privatisation has moved an inch closer amid revelations that a transaction advisory services consultant was on the ground.
BY TAFADZWA MHLANGA
In a statement accompanying the bank’s half year financial results, Dzumbunu said a consultant to assist in partial privatisation has been identified with recommendations under review by the special oversight committee at the Procurement Regulatory Authority of Zimbabwe.
The financial institution is one of many State-owned entities earmarked for either partial privatisation or full privatisation as part of parastatal reforms geared towards unlocking shareholder value and capitalise the parastatals which relied heavily on government bailouts.
“The government decided that a number of parastatals including POSB will meaningfully contribute towards the revival of Zimbabwe’s economic fortunes if they are partially privatised. In light of the above, the government earmarked the bank for partial privatisation by the end of the fourth quarter in 2019,” Dzumbunu said.
The role of the transaction adviser is to provide guidelines on evaluation criteria of expression of interest, percentage shareholding for privatisation, conditions of sale, and undertake due diligence of potential investors.
Approval of the preferred investor by Cabinet will be through the Cabinet Committee on State Enterprises and Parastatals Development upon receipt of submission by the Finance minister. Government, through the Transitional Stabilisation Programme, had set a June 2019 deadline to partially privatise the savings bank. This, therefore, means government is lagging behind.
During the six months ended June 30, 2019, the bank posted a net profit of ZWL$24,7 million, compared to the ZWL$8,11 million recorded during the same period in the prior year.
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The cash and cash equivalents of the six months ended June 19, 2019 increased by 14,9%, amounting to ZWL$48,98 million paralleled to a total of ZWL$42,61 recorded on June 18 the prior year.
POSB’s loan book increased by 3,3% after their net loans and advances amounted to ZWL$127,35 million during the period ended June 19, 2019 compared to ZWL$123,22 recorded in the period ended December 18, 2018.
The savings bank’s net operating income of the six months ended June 30, 2019 increased by 99% to a record of ZWL$43,33 million from ZWL$21,74 million achieved in the prior year. The operating expenses of the savings bank also increased by 36,7% from the previous record of ZWL$13,68 on the period ended June 18, 2018 to a total of ZWL$18,63 recorded in the same period. Dzumbunu says the bank is confident that the measures taken also by the central bank to curb the money supply growth will stabilise the exchange rate of the local currency against the major currencies.
Zimbabwe has been facing an unstable exchange rate since the introduction of the interbank market when the Zimbabwe dollar and United States dollar 1:1 exchange rate was scrapped off. “We are, however, confident that measures taken by the central bank aimed at curbing money supply growth will stabilise the exchange rate of the recently introduced Zimbabwe dollar against major currencies and that inflation will decline in the medium term,” Dzumbunu said.
This is despite the fact that the Zimbabwe dollar has been losing value against the US dollar and is now trading at US$1:ZWL$ 15 on the interbank market.
When the interbank was introduced in February this year, the local currency was trading at US$1:ZWL$2.5.