HARARE – The People’s Own Savings Bank (POSB) is one of the few State-owned institutions that are performing exceptionally well — above market expectations.
The POSB recently posted a $1,2 million profit and last month gave over $313 000 in dividend to government, for the second time in five years.
Daily News Business Editor John Kachembere caught up with POSB chief executive Admore Kandlela to chat on the bank’s fine run in a dollarised economy and in a very harsh economic environment where several banks have folded up.
Below are excerpts of the interview.
Q: How have you managed to successfully steer POSB to profitability?
A: Our strategy as a bank is to stick to basic banking tenets whether in deposit taking, lending or deal structuring. We are conservative in risk taking, following clear “safe bank” model.
This has to date resulted in the bank not taking undue credit losses even if the operating environment has become more difficult.
The opening up of new electronic-based delivery channels in the past five (5) years, and the agency model have ensured that our cost structures are manageable.
Q: POSB is one of the banks with a huge network in Zimbabwe, how many branches are there?
A: We have 34 branches, but our services are also accessed through 220 Zimpost Agency Offices, 18 Meikles Financial Services outlets (soon to be 62).
Q: Do you have any expansion plans?
A: Our thrust going forward will be to expand our presence through agency and electronic banking channels. However, were there is need for physical presence, and such an outlet can be maintained at least on a break-even basis, we will establish in such areas to buttress our financial inclusion mandate through proximity banking.
Q: What are some of the strategies that you are implementing to attract more customers and to keep in line with changing customer needs?
A: We will continue to launch new products, and delivery channels that resonate with ever-changing customer needs. Service delivery will continue to be a cornerstone of our strategy.
Q: What is POSB’s drive to greater lending that we have witnessed in the last few years?
A: We have tried to maintain balanced growth in our loan book in the past 5 years so that as the book grows, non-performing loans are managed at acceptable levels. A relatively conservative loans-to-deposit ratio has been maintained, to ensure that as the deposits increase, the loan book also follows suit; taking into account liquidity issues and heightened credit risk on the market.
Q: How much have you given out in loans so far? And what is the recovery rate?
A: Our loan to deposit ratio stood at 65,5 percent as end of June 2015. The recovery rate compares well, and is within the Zimbabwean banking sector average.
Q: What are some of the challenges you are facing in the banking sector?
A: As alluded to previously, general market liquidity challenges and heightened credit risk on the market as many companies are closing and employees being retrenched. These developments generally affect banking sector operations. However, our pro-activeness as a bank and the “safe bank” model we are following have ensured the bank’s prosperity.
Q: What are your future plans for the bank?
A: We will remain predominantly a retail and savings bank, promoting financial inclusion for all population segments in Zimbabwe. Strategic alliances, out-of-branch delivery channels, and innovative products should get us where we want to be in the future. Daily News