SA Post Office (SAPO) CEO Mark Barnes resigned with immediate effect on Thursday, citing differences on a forward strategy in relation to the structure of the group, in particular the location of Postbank.
The state-owned enterprise said in a statement that “following discussions on Barnes’ resignation with the Board, the parties are in agreement on an amicable separation”.
Many people speculated that there is more to the story, and Business Day has now revealed the true reason for his resignation.
According to the publication Barnes had a “sharp difference of opinion with the government and the board” over how the Post Office and Postbank will work together.
Barnes wanted the two companies to be fully integrated to offer a suite of services, including mail delivery, ecommerce, and financial services.
Armed with an established nationwide network, Barnes believed that the Post Office and Postbank could deliver banking services to the poor for cheaper than any other player.
The government, the SAPO board, and other organisations, however, want to separate the Postbank from the Post Office.
Business Day reported that the SAPO board wants to “insert a Chinese wall between the Post Office and Postbank”.
This would reportedly be done by inserting a Postbank-controlling company between the Post Office and Postbank.
In May, Barnes said that while SAPO already has a large financial services portfolio, it sees potential in offering more benefits to South Africans – particularly in the area of loans.
It has reconciled its financial services in relation to the Banks Act and the Companies Act, and once Postbank has finalised the structure of the holding company and acquired its lending licence, these loan services can become widely available.
“All successful Post Offices in the world have a significant proportion of their income coming from financial services,” said Barnes.
30% of SAPO’s revenue currently comes from its financial services institution, Postbank, but this is still less than many global leaders.
According to Barnes, 60% of China Post’s revenue comes from financial services, while a “high proportion” of the UK Royal Postal Service’s revenue can be attributed to its financial products.
The proposed new loan services will offer assistance to South Africans with a predictable income stream, without requiring them to list assets as a collateral measure.
Barnes said he expects ecommerce and financial services to become a big portion of the Post Office’s revenue by 2030.
SAPO plans to launch its new ecommerce platform, and Barnes hoped that it could become a leading ecommerce player through its implementation.
“We’re going to be focusing on the export of South African-made goods on our platform,” said Barnes.
“It’s the Post Office’s vested interest to have a platform that promotes exports, because the way the postal revenue works is the originator of the postal event gets most of the revenue,” Barnes explained.
He said the exporter usually gets about 80% of the terminal dues – and given that SAPO imports much more than it exports through its current ecommerce system, the process isn’t particularly profitable.
Barnes added that he recently visited Istanbul, Turkey to discuss “Ecom Africa”, which he hopes will become one of the world’s leading ecommerce players.
“Ecom Africa is an African ecommerce platform which could rival Alibaba and Amazon if you look at the combined people growth in the entire African continent and some other parts of Europe, which are talking to us as a partner.”
Due to SAPO’s access to all South African addresses, Barnes also believed in the potential for “virtuous data mining capacity within the Post Office”.
New interim CEO
Following his resignation on Thursday, the SAPO board thanked Barnes for his “enormous service to the SA Post Office and the country during his tenure”.
“In his time at the SA Post Office, Barnes has led the stabilisation of the organisation as well as pioneered its positioning as a relevant access point of government services for our communities,” it said.
The Post Office assured customers and the SA public that the departure of the outgoing CEO would not negatively impact the organisation’s operations.
Lindiwe Kwele, the SA Post Office’s current COO, has been appointed as the interim CEO until the recruitment of a new CEO occurs.
“To ensure continuity, Barnes will remain within the SA Post Office fold for a period to aid the transition of the interim Group CEO,” the SA Post Office said.