South Africa’s state-owned bank has R8.5 billion in deposits

The Postbank has grown its asset base to R8.5 billion in the past year, an increase of nearly R1 billion in twelve months, as it gears up to become a fully fledged commercial bank. 

The Reserve Bank revealed this in its latest Quarterly Bulletin, which outlines the financial state of various government-run institutions such as the Land Bank and the Postbank. 

The Postbank has been operating in its current form for years in South Africa, with plans to make it a fully fledged state bank emerging in the 2010s. 

It has a rich history and is closely tied to the Post Office, which is the oldest company in South Africa. Founded in 1875, the Postbank was first established as a standalone entity known as the Savings Bank.

Its first branch was opened in Cape Town in 1884, and it rapidly expanded to 125 Post Office branches across South Africa. 

Despite using the Post Office’s footprint, the bank was still a standalone entity, and its name changed to the Post Office Savings Bank. 

It was only in 1974 that the Post Office took full responsibility for the Post Office Savings Bank and the National Savings Certificates when the bank was computerised. 

The idea of the bank becoming a fully-fledged commercial bank, operated and owned by the state, emerged in the early 2000s when South Africa’s social grant system began expanding. 

In 2003, the Post Office launched its Paymaster to the Nation project, through which recipients of social grants could open a Postbank account and receive their grants. 

The bank offered its products and services through all Post Office branches, which have over 2,000 locations nationwide. 

The ANC has long aspired to create a state-owned bank in South Africa to drive transformation in the financial sector. 

While the Postbank has always offered minor banking services, it was strictly a savings subsidiary, unable to provide transactional accounts, credit, and other banking services.

With the Postbank Amendment Act in effect since March 2024, it can apply for a new banking licence from the Reserve Bank’s Prudential Authority to become a fully-fledged commercial bank. 

The bank said it would apply for the new licence in the past financial year, but no date has been set for its launch. 

The Postbank’s finances 

In the past few years, the Postbank’s finances have been the subject of much scrutiny, with the dire situation of the Post Office clouding its future. 

In July 2023, the Post Office was placed in business rescue to try and save the company after it had received over R10 billion in government bailouts over the past decade. 

As part of being placed into business rescue, the Post Office received a R2.4 billion injection from the National Treasury.

This bailout covered operations, settled debts, and paid salaries and severance packages. In September 2024, the Post Office reported that 4,875 of its 11,083 staff had been retrenched.

Only 113 of its 1,023 branches were profitable, so 366 were closed. This left 657 branches nationwide.

The plan also included another R3.8 billion bailout from the Treasury to pay statutory and payroll creditors. 

However, in November 2024, this plan was derailed when the Finance Minister said that the Post Office would not receive further government bailouts if it escaped business rescue.

Luckily for the Postbank, while it still relies on the Post Office for its physical infrastructure, it is now a standalone entity. 

Under the Postbank Amendment Act, the Postbank’s shareholding was transferred from the Post Office to the government. 

During 2023, its deposit base came under pressure, declining by over R500 million to R7.6 billion. According to the Reserve Bank’s latest data, the bank bounced back in 2024, growing its deposit base to R8.5 billion.