POSB incur ZWL3.1 million costs on COVID-19 interventions, considers loan forbearance to cushion borrowers

0
273

• Market dynamics induced by COVID-19 have affected the ability of some borrowers to service their obligations
• During HY20, the Bank recorded a loss of ZWL66.92 million in inflation adjusted terms
• Liquidity ratio of the Bank improved to 71%

Harare – The People’s Own Savings Bank (POSB) said it incurred costs in the sum of ZWL3.1 million relating to COVID-19 safety and health interventions during the half year period ended 30 June 2020, as the unanticipated outbreak of the pandemic has put a strain on business operations.

Among the measures the Bank took to mitigate the impact of COVID-19 on its employees and customers are streaming operations and decongesting of all departments and banking halls, capacitation of key staff through technology to work remotely as well as rationalising the branch network and reconfiguring the Bank to meet the needs and demands of the “new normal”.

In a statement accompanying the Bank’s half year financials, acting board chairperson, Israel Ndlovu said that whilst the full COVID-19 impact is yet to unravel, the Bank has assessed that the changed operating models and market dynamics induced by the pandemic have affected the ability of some borrowers to service their obligations.

“As such, the Bank may consider loan forbearance to cushion some borrowing customers and mitigate against the risk of credit losses.

“In addition, mismatches may arise between assets and liabilities of the Bank due to changed business models of providers of long term funding”, he added.

During the period under review, POSB posted a net profit of ZWL107.74 million, up 336% from ZWL24.70 million recorded in the comparative prior period in historical terms.

“However, in inflation adjusted terms the Bank recorded a loss of ZWL66.92 million, down from a loss of ZWL208.03 million recorded in the six months ended 30 June 2019,” said Mr Ndlovu.

Net operating income in inflation adjusted terms declined by 46% to ZWL268 million from ZWL497 million achieved in the prior year.

Meanwhile, operating expenses were restricted to ZWL208 million, representing a decrease of 11% from ZWL 230 million incurred in the comparative period.

Mr Ndlovu said operating expenses would have been significantly lower than reported had it not been higher staff costs incurred by the Bank to cushion staff against rising inflation.

The Liquidity ratio of the Bank improved to 71% as at 30 June 2020 up from 30% prescribed by regulations.

On the outlook, Mr Ndlovu said that despite the anticipated economic challenges ahead, the Bank will continue to create value for its shareholders by identifying opportunities for improvement and growth by focusing on the ongoing digitalisation of its platform in line with the Bank’s digitally focused business model.


Equity Axis News

LEAVE A REPLY

Please enter your comment!
Please enter your name here