Postbank seeks to adopt commercial status
What you need to know:
- “Right now, we are laying the foundation for getting into commercial banking by ensuring all systems are in place. We have the capital but we need to evaluate how we are going to fund operations and this is where shareholder issues come in,” Ms Karanja said.
- The savings bank currently has Sh21 billion in deposits and earns income through money transfer services, cash collection, payment of pensioners, wage settlements, disbursement of student loans and investment in the stock market.
Postbank is restructuring its operations to take a commercial banking model, as it seeks to widen its revenue basket amid an increasingly competitive market.
Currently, it operates a savings service with no lending or current account products.
Postbank acting managing director Anne Karanja said in an interview with the Nation yesterday that an evaluation of the bank’s business was ongoing, with a view to restructuring its mode of operation. This will allow the bank to venture into activities such as lending and the issuance of cheque books.
Postbank, which is fully government-owned, will seek the nod from Central Bank of Kenya after the conclusion of the evaluation of its operations. The exercise, to be completed in three months, is being undertaken by financial audit firm PricewaterhouseCoopers.
“Right now, we are laying the foundation for getting into commercial banking by ensuring all systems are in place. We have the capital but we need to evaluate how we are going to fund operations and this is where shareholder issues come in,” Ms Karanja said.
CONVERTED TO PUBLIC COMPANY
She expects the bank to be converted into a public limited company offering commercial banking services next year should the regulator approve the request.
“We are now trying to see how we can realign our current resources to be able to operate within a different legal framework because operating as a commercial bank is a bit different from our current operations because of the regulations.”
The savings bank currently has Sh21 billion in deposits and earns income through money transfer services, cash collection, payment of pensioners, wage settlements, disbursement of student loans and investment in the stock market.
