POSB records loss

0
52

THE People’s Own Savings Bank (POSB) has recorded a $0,209 million loss attributed to a memorandum of understanding (MoU) entered into by all financial institutions and the Reserve Bank of Zimbabwe which reduced bank charges and interest rates.

Chief Reporter

In a trade update accompanying its financial results for year ending December 2013, chief executive officer Admore Kandlela said due to the MoU, total income dropped by 15% from $22,73 million in 2012 to $19,21 million in 2013.

Kandlela said the bank witnessed a decline in profitability and recorded a loss of $209 000 million during the year under review compared to a profit of $2,47 million in the prior year.

“Total income declined by 15% from $22,73 million in 2012 to $19,21 million in 2013 and this is mainly as a result of the effects of the MoU between the Reserve Bank of Zimbabwe and financial institutions which saw the sector recording a significant decline in bank charges and lending rates,” he said.

In January last year, RBZ signed a MoU with banks — through the Bankers’ Association of Zimbabwe — with the institutions agreeing to reduce lending rates and pay interest on deposits among other reforms.

The MoU — which was cancelled late last year — required, among other things, that lending rates be capped at 12,5% above each respective bank’s weighted average cost of funds.

Banks were ordered to charge up to 0,5 % of cash withdrawal amount subject to minimum charge of $2,50 while ledger fees, maintenance and service fees will cost up to $4 per account.

The central bank and bankers also agreed to push for the mandatory use of debit cards.

However, Kandlela said the bank which has 34 branches and 180 Zimpost outlets countrywide saw its costs decline by 4% due to effective cost cutting measures.

“Total assets grew by 12% from $80,57 million in 2012 to $89,97 million by December 2013. On the same note, total deposits grew by 13% from $63,81 million in 2012 to $72,15 million by December 2013,” he added.