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Government’s plans to corporatise Postbank SA are at an advanced stage, according to Telecommunications and Postal Services Minister Siyabonga Cwele.
After delivering his budget speech in Parliament this week, Cwele told City Press the outstanding step in the process was the assessment of prospective candidates for board membership.
Government and the Reserve Bank were also still discussing the form the bank’s holding company would take.
Otherwise, all the other steps, including the submission of a clear five-year financial projection plan and the separation and audit of assets and liabilities of the SA Post Office and Postbank, have been completed.
Cwele said the corporatisation of Postbank was a key part of achieving a successful turnaround of the Post Office.
“[The turnaround] is saying that you must strengthen your financial services and that’s why we are trying to push the Reserve Bank with this application for the corporatisation of Postbank.
“To me, that is very important,” he said.
Cwele gave several examples of how people in rural areas queued at post offices – not to get stamps, but to deposit money.
“We are supposed to modernise the postal service and to make sure we extend the financial services to the under-serviced areas and the unbanked.
“That is why the issue of Postbank becomes critical. The people in rural villages must not only have access to deposit their money, but they must also … if it is corporatised, it means it operates like any other bank, but with a clear developmental mandate.
“It means you may borrow money even if it is a small amount,” he said.
When he took office in May last year, Cwele said he met the Reserve Bank, which made clear what steps should be followed to apply for a licence to corporatise Postbank:
. Have a clear five-year financial projection for the bank to see whether it would have money to operate as a bank for up to five years. This was done.
. Separate the SA Post Office and Postbank’s assets and liabilities. This had also been concluded.
. Bank board members have to undergo rigorous assessments, which are done by independent bodies. As part of that risk management assessment, the government has submitted names of suitable candidates.
This is the final step before the Reserve Bank makes its decision.
Cwele is cautious about “hurdles” related to the bank holding company because strict requirements have to be met for this, according to the SA Postbank Limited Act.
“We are still engaging the Reserve Bank on the most difficult hurdle: what form this bank holding company should take,” he said.
Meanwhile, Cwele announced that the turnaround plan for the Post Office had been finalised and would be submitted to Cabinet for approval.
He said the priority was addressing leadership issues through the appointment of a board and by capable management.
The Post Office board resigned in November last year after a crippling four-month strike by post office workers.
Simo Lushaba was appointed as an administrator. His contract, which ended this month, has been extended to July.
However, the Post Office is expected to declare a R1.3 billion loss for the year to March.
“That’s why I put the turnaround on this year’s corporate plan because we don’t want to produce a turnaround and then only do the corporate plan next year. The managers must start implementing it now,” said Cwele.
He said his priority was to appoint a new Post Office board.
Cwele said he was “applying his mind” to the names that had already been received.
The process has been delayed because the first round of applications did not yield the correct skills set.
The main issue regarding the turnaround strategy is for the Post Office to review its business model and to focus on revenue
