Postbank, the state-owned bank that pays out social grants, ended its year to March with a R5.2 million loss, after a R94 million profit the year before. It blames one line: a R44.5 million interest charge from SARS. Without that, Postbank says, its profit before tax would have come to R42 million.
The charge is unusual for Postbank. For the three years to 2023/24 it was SARS paying Postbank interest rather than the other way round, and in 2024/25 the bank owed the revenue service nothing in interest at all. Daily Investor, which went through the annual report, says this is the first time in four years Postbank has incurred penalties from SARS. "This context is important in understanding the underlying performance of the business," chief executive Nikki Mbengashe said.
What the SARS bill does not explain
Daily Investor took the charge out and still found a bank going backwards. After normal tax, it calculates, the year would have ended with about R39 million of profit, around 58% less than the year before. Interest income slipped by about 6% as interest rates came down, and running costs rose about 3%, spent on modernising its systems, software licences, staff and replacement cards.
The biggest dent is in fees, and it traces back to the Reserve Bank. Net fee and commission income fell 56.7% to R60.4 million, which Daily Investor puts down to a restriction known as a Variation Notice that stopped Postbank issuing cards to its existing core depositors or taking on new customers. Fees are what a bank earns from cards and accounts, so a bank that cannot hand out cards earns fewer of them. The restriction is not a new kind of problem: in 2023 Mbengashe told a parliamentary committee that a variation notice was stopping Postbank from taking on new customers. None of the coverage says what the current notice requires or when it might lift.
The Land Bank money and the R2.4 billion ask
Something else flattered the year. Postbank wrote back R58.9 million it had set aside for loans going bad, about four times the year before, and Daily Investor says that was largely because Land Bank repaid capital. Without that write-back, the publication reckons, Postbank would have made an operating loss before tax even with the SARS charge left out.
Mbengashe's plan is to fix the income side. She says Postbank must "continue to build a stronger and more diversified revenue base", and wants to turn a customer reach built on paying grants to 7.1 million beneficiaries into people who actually use the bank. To get there, Postbank has asked Treasury for a R2.4 billion bailout to become a fully licensed commercial bank, eNCA reports. It wants to become a full commercial bank after a year in which a Reserve Bank restriction kept it from signing up new customers.
