Technology is Key Driver for POSB’s 2018 Performance
The People’s Own Savings Bank (POSB) recorded a whopping 19.6 million from its last year’s net profit. This was necessitated by the bank’s innovation in using modern technology to carry its businesses. In 2018 the operating costs increased marginally by 5%, which was significantly less than the annual inflation of 42.09% for 2018. For the full year 2018, the cost to income ratio was 62%, which is slightly above the industry average of 59%.
POSB CEO Admore Kandela said, “The relatively low operating expenditure underscores the success of our cost containment measures implemented throughout the course of the year 2018 given the inflationary pressures in the same year.”
“Despite the challenging environment, net operating income increased by 6% from the prior year, largely due to increased use of card-based and electronic banking platforms as an alternative to cash transactions. As at 31 December, 2018 deposits grew by 16.5% to $185.4 million from $159.1 million recorded at 31 December 2017 as a result of a significant improvement in market liquidity and the success of deposit mobilisation strategies of the Bank.”
Capital adequacy ratio surged by 133 basis points from 33.09% as at 31 Dec 2017 to 34.42% as at 31 Dec 2018 indicative of the long-term stability and scope for growth of the Bank’s business. Recapitalisation efforts will continue in order to achieve $100 million by year 2020. The bank’s loan book increased by 30% from $85.4 million as at 31 December 2017 to $111.2 million as at 31 December 2018.
The bank is now managing a cleaner loan book considering that the non- performing loans ratio declined from 17% in 2016 to 6% in 2018. Management is confident that the Bank will achieve the set target of 5% by 31 Dec 2019. The Bank will continue to leverage on technology platforms to accelerate our digital and low-cost leadership strategy. The bank was leveraging on technology to improve efficiencies, serve customers better, contain costs as well as achieving the desired goals.
This year the financial institution undertook an upgrade of its information technology server infrastructure which has seen it registering vast improvements in uptime of the system’s network. Recently, the bank acquired and has since begun the deployment of MPOS (Mobile Point-of-Sale) machines in order to augment existing own POS (Point of Sale), merchant POS and other digital platforms. These devices are designed to provide both buyers and sellers with a convenient medium of transacting thus promoting a cash-lite society amid the backdrop of the present cash shortages.