POSB Pauses Privatization Plans: Awaits Further Guidance

April 4, 2024
POSB Bank | Report Focus News
The planned partial privatization of the People's Own Savings Bank (POSB) has been halted as the bank awaits additional direction from its shareholder.

The People’s Own Savings Bank (POSB) has halted its planned partial privatization as it awaits additional direction from its shareholder.

Initially set for completion by the end of 2023, the partial privatization forms part of the government’s broader strategy to reform underperforming public enterprises.

Under this reform agenda, most parastatals are targeted for either privatization or capitalization to enhance efficiency and reduce reliance on state bailouts.

The proposed partial privatization of POSB involves the government selling a minority stake, with proceeds intended to partly capitalize the bank.

In its financial results for the year ended December 31, 2023, the bank noted that the partial privatization, which commenced in 2001, had been temporarily suspended at the stage of finalizing outstanding tasks, including securing prospective investors. All related activities have been rescheduled for 2024 pending further guidance from the shareholder.

Last year, the government had invited expressions of interest, seeking strategic investors for up to a 29 percent stake through private placement, followed by an initial public offering (IPO) to diversify ownership.

POSB, wholly owned by the government, has been among the 15 parastatals earmarked for privatization under various models. Other entities include Air Zimbabwe, Agribank, TelOne, and NetOne.

Meanwhile, POSB reported significant financial growth, with a net profit of $97.35 billion in historical terms, a substantial increase from the previous year. Adjusted for inflation, the bank’s net profit amounted to $110.16 billion, demonstrating positive business performance despite inflationary pressures.

The bank’s CEO, Mr. Garainashe Changunda, highlighted a notable increase in net operating income, emphasizing continued growth amid challenging economic conditions.