Push for Postbank to become South Africa’s first state-owned bank
Parliament’s Select Committee on Public Enterprises and Communications has called on the Postbank to speed up its banking licence application process so that it can offer full financial services without limitations.
In a presentation to parliament, Board Chairperson for Postbank, Phumzo Noxaka, said the bank operates with an exemption from the Bank Act and this was granted by the Reserve Bank.
The committee said the bank now needs to speed up the banking licence application process so that it can offer further services.
Postbank informed parliament that the financial position of the bank is anticipated to decline for the next two years, this is based on capacitation and modernisation plans for the next two years, as well as the modest economic recovery.
Postbank acting chief executive, Hannes van der Merwe, said despite not being a fully licensed bank, management tracks all key banking ratios and metrics, and is satisfied that all these are well within acceptable ranges.
Van der Merwe said the impact of Covid-19 on the bank is that the risk profile of the bank deteriorated across all types because customers are losing jobs and do not have money to save and invest in the bank’s products.
There is also an increase in IT and data costs to enable staff to work from home. In addition, the bank waived fees chargeable to Sassa beneficiaries in March 2020, resulting in a loss of revenue of R9 million.
Grant growth
Postbank reported growth during the countries lockdown primarily as a result of the accounts Postbank has opened for the beneficiaries of the Covid-19 unemployment relief fund.
Over 6.3 million unemployment grant disbursements and credit transactions were done by Postbank to the value of over R3.2 billion.
However, MPs questioned if the bank’s systems are reliable in grant payments and said that the bank needs to operate effectively and efficiently in assisting poor people of the country.
Concerns were also raised about the the stability of the board and filling of vacant critical positions is critical to the governance and financial stability of the organisation. Postbank currently has an acting CEO and acting CFO.
The committee called on the board to ensure that these vacancies are filled. Ms Noxaka said the board has had challenges in attracting banking professionals, the issue is meeting the salary requirements and people are wary of working for a state-owned company.
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