CAPE TOWN (Reuters) – South Africa’s Post Office Group plans to register its financial services unit as a bank by July 3, a document handed out in parliament showed, a move that would put the company in the middle of a fiercely competitive market.
The restructuring of Postbank is part of the government strategy to provide a wider range of accessible, relevant and affordable financial services products to those without bank accounts and low-income earners.
But it also leads the organisation down a highly competitive path dominated by five established banks: Barclays Africa, Standard Bank, Nedbank, FirstRand and Capitec.
Chief Executive Mark Barnes is pinning his hopes on the state-owned company’s network of 2,500 branches that gives it a presence in almost every town and city in the country.
Postbank has 1.4 billion rand ($104 million) in excess capital, enough to meet regulatory minimum requirements for a bank, the document showed.
Barnes, who was appointed in 2015, told lawmakers the company’s ability to reach the remotest areas also puts it an ideal position to start distributing government welfare grants.
“We have the best footprint, we have the most points of presence and have some experience in that (social grant disbursements),” he said.
($1 = 13.5060 rand)
(Reporting by Wendell Roelf; Editing by Mark Potter and Louise Heavens)