Cape Town - The SA Post Office plans to register its financial services unit as a bank by July 3, a move that will place Postbank in the fiercely competitive banking sector. This was revealed in a document handed out in Parliament on Tuesday.
The restructuring of Postbank is part of the government strategy to provide a wider range of accessible, relevant and affordable financial services products to those without bank accounts and low-income earners.
But it also leads the organisation down a highly competitive path, dominated by five established banks: Barclays Africa, Standard Bank, Nedbank, FirstRand and Capitec.
Chief executive Mark Barnes is pinning his hopes on the state-owned company’s network of 2 500 branches that gives it a presence in almost every town and city in the country.
Barnes said that the Postbank would provide inclusive financial services at the right cost to communities in rural areas.
He added Sapo was interested in participating in the distribution of the South African Social Security Agency (Sassa) grants.
“We are also focusing on e-commerce in collaboration with the Universal Postal Union and local and international players to make a case for South Africa being an e-commerce hub for the Southern Africa region. In line with this, we intend expanding our space at OR Tambo by 70 percent and are also engaging our port and rail operators.
Postbank has R1.4 billion in excess capital, enough to meet regulatory minimum requirements for a bank, the document showed.
Dr Siyabonga Cwele, the Minister of Telecoms and Postal Services, said the Post Office was turning around and ready to play its part in delivering more services to all South Africans.
Cwele said the Department of Telecoms and Postal Services was engaging with the National Treasury to expedite the corporatisation of the Postbank and that nominees had passed the fit and proper process and would be appointed after following due process.
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He said there were a few challenges such as compliance regarding Postbank bringing financial services to the unbanked, but the organisation’s management was working flat out to achieve that.
Cwele said the organisation struggled over the past year and was grateful for the cash injection of R650million received from the National Treasury.
The Post Office is not out of the woods yet, but was on the road to recovery, he said. Barnes gave an overview of the organisation which showed a year-to-year profit decline of R166 million (6 percent) and that it was below budget by R701 million (23 percent).
“We are probably close to the numbers we projected. Our mail revenue is down 6 percent. In the last six months 120 of our major clients have left. That’s about one a day. Mail revenue is declining and we have not seen evidence of people coming back to us yet.”
He said on the retail side, the Post Office saw retail (year-to-date) revenue of R349 million, showed a year-on-year increase of R66 million (15 percent) and was below budget by R303m (46percent).
On staff expenses and labour stability, the post office had staff expenses of R2.8billion, a year-on-year increase of R28 million (1 percent) and was below budget by R720 million (19 percent).
The Post Office’s employee headcount was reduced by 1 794 to 18 987 from a headcount of 23 591 in 2014.