POSB after tax-profit up 22pct

HARARE,– People’s Own Savings Bank (POSB) reported a 22 percent  increase in after-tax profit to $9,68 million in the full year to December on increased revenue and cost containment measures.

Net interest income increased by 28 percent from $9,5 million in the previous year to $12,2 million while fees and commissions income increased by 4 percent to $21,8 million. As a result, net operating income increased by 8 percent from $32,9 million in the previous year to $35,57 million.

“The favourable performance (profit) is to a larger extent attributed to the bank’s emphasis on increasing revenue streams through introduction of new revenue generating products as well as emphasis on cost containment through tight expenditure control,” said chief executive Admore Kandlela in a statement accompanying results on Thursday.

Net impairment charges declined from $1,35 million in the previous year to $1,26 million.

Operating expenses rose four percent from $25 million in the previous year to $25,9 million as a result of increased business growth.

Cost to income ratio improved from 76 percent in the previous year to 73 percent on the back of growth in income which outweighed the increase in operating expenses.

Total assets rose by 22 percent from $134 million recorded in 2015 to $164 million.

Deposits increased by 22 percent to $115 million from $94 million in the previous year attributed to increased visibility.

However, loan and advances to customers fell from $78,2 million in 2015 to $72,9 million in a bid to mitigate default risk. The loan to deposit ratio declined to 58 percent from 78 percent in 2015.

Non-performing loans declined slightly from 6,9 percent in the previous year to 6,23 percent.

Investment properties decreased from $420,000 in the previous year to $415,000 as a result of downward revaluation of properties owing to poor performance of the property sector.

The bank holds treasury bills (TBs) worth $45,95 million up from $28,8 million previously.

No impairment charge was applied on TBs, reflecting the bank’s confidence that the  government will honour its obligations on maturity- a common feature on all reporting banks.

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