The future of Postbank’s plans to become a fully-fledged bank may be under threat as it stands to lose R3.5bn if the Post Office is placed in business rescue, while its deposits have no protection in law.

But even as it stands to lose far more money than it has provided for in financial statements, insiders do not believe its deposits are at risk, even as the Treasury told Business Day it does not guarantee them.

Postbank has just over R8bn in deposits and R3.5bn in assets, and according to court papers filed by the insolvent Post Office in support of its business rescue application, it is owed R3.9bn. 

On Friday, the Post Office, which owes creditors R9.4bn, applied to the Gauteng High Court (Pretoria) to be placed in business rescue to save it from liquidation.

If business rescue goes ahead, the Post Office will pay creditors an estimated 10c for every rand owed.

In Postbank’s case, this amounts to roughly R390m being paid to it. This leaves the Postbank short of R3.5bn – the value of its entire assets, outside of deposits, according to its financial statements.

Before it took over the payment of grants, Postbank provided the Post Office with grant funding days before it was provided by Sassa as well and giving it an almost R1bn loan, which seems to be why so much is owed to it.

Some of Postbank’s more than R8bn deposits come from poor and rural people residing in areas where there are no banks and stokvels.

This money is apparently untouched, but Postbank refused to answer questions about this cash.

Full Business Day report