Post Office to launch own bank

The Reserve Bank has granted authorisation to the South African Post Office (Sapo) for the latter to establish its own bank. The Postbank will now be re-registered as a new company in order for it to operate as a fully-fledged bank and to allow it to lend money.

While the Post Office has, for some time now, been in dire financial straits, Postbank is reportedly unaffected by the Post Office's financial woes as it is a separate entity holding R7.3 billion in deposits. Mark Barnes, Sapo CEO, has expressed confidence in the Post Office's ability to become profitable by 2018, and believes this banking approval will help to put the organisation on a steady footing going forward.

The Post Office will reportedly focus on setting up risk management systems within Postbank in preparation for when the final banking license has been granted. Through Postbank, the Post Office intends to use its established network throughout SA to service at least 5.5-million people, many of whom live in rural areas and are unbanked. Part of Sapo's future growth strategy is to be a major distributor of government services, for example, social grants.