President Cyril Ramaphosa has proclaimed the commencement of the new South African Postbank Amendment Act – which will become active law in the country on 19 February 2024.<\/p>\n\n\n\n
Ramaphosa signed the Postbank Amendment Bill into law in September 2023, formally transferring the Postbank’s shareholding from the embattled South African Post Office to the government.<\/p>\n\n\n\n
This allows for the creation of a Bank Controlling Company \u2013 the new holding company of a bank – opening the way for Postbank to become a fully-fledged state-owned banking operation in the country.<\/p>\n\n\n\n
While Postbank has always offered minor banking services through the Post Office, it was strictly a savings subsidiary, unable to offer transactional accounts, credit, and other banking services.<\/p>\n\n\n\n
With the Postbank Amendment Act in effect, the group, now independent of the Post Office, can move forward as a state-owned entity, apply for a new banking licence from the South African Reserve Bank, and launch full banking operations. <\/p>\n\n\n\n
While maintaining the Postbank name it held under the Post Office, it will become an entirely new banking entity.<\/p>\n\n\n\n
Next steps<\/strong><\/p>\n\n\n\n The bank previously noted that when the new Act comes into law, it will start resubmitting and finalising its section 16 application to become a registered state-owned bank. It said it hopes to finalise the licensing for operations in the 2024\/25 financial year.<\/strong><\/p>\n\n\n\n Postbank’s primary objective will be to offer affordable financial services to communities not catered for by traditional retail banking, SMEs and the public sector.<\/p>\n\n\n\n In its annual performance plan for 2023, the bank acknowledged that it would be entering an already highly competitive banking market.<\/p>\n\n\n\n In essence, Postbank is \u2018late to the party\u2019 for offering affordable services as provided by smaller banks and business services offered by the likes of larger legacy banks.<\/p>\n\n\n\n Compared to large banks (Absa, FNB, Standard Bank, Capitec and Nedbank), Postbank argued that there is a small overlap of target customers between low, medium, and high-income customers.<\/p>\n\n\n\n Compared to smaller banks (TymeBank, African Bank, Bank Zero and Grindrod Bank), Postbank said there is a greater overlap in target customers and economic segments with grant recipients, low-income earners and \u2018Post box\u2019 accounts already targeted by these firms.<\/p>\n\n\n\n Despite this crossover, the group says there are about 6.5 million people in South Africa who are unbanked<\/strong>, and 15 million existing customers that are under-banked. In addition to this, there is about R12 billion found outside the formal banking system, excluding stokvels, which can be addressed.<\/p>\n\n\n\n The group sees a lot of opportunity in the SMME sector \u2013 a group which is quickly becoming the key focus of South Africa\u2019s other big banks.<\/p>\n\n\n\n However, despite its ambitions, the bank is facing several headwinds ahead of its planned launch.<\/p>\n\n\n\n Postbank recorded a net loss of R2 billion during the 2022\/23 financial year, following a R302 million profit in the last year.<\/p>\n\n\n\n The bank attributed the loss to the payment of grants, which it took over in 2022. Significant investment in manpower and supplementary services for physical cash payments were required.<\/p>\n\n\n\n Nevertheless, the bank said that it remains solvent, given the value of assets, even with the loss.<\/p>\n\n\n\n