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Absa Group

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Barclays Africa Group
Company typePublic
JSE: BGA
IndustryBanking, Financial services, Investment services, Insurance services
Founded1991
Headquarters
South Africa
Area served
Botswana, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria, Seychelles, South Africa, Tanzania, Uganda, Zambia
Key people
Wendy Lucas-Bull
(Group Chairman)
Maria Ramos
(Group Chief Executive)
ProductsCommercial banking, Financial services, Retail banking, Credit cards, Private equity, Investment management, Investment banking
RevenueIncrease R72.900 billion (2017)[1]
Increase R22.769 billion (2017)[1]
Increase R16.504 billion (2017)[1]
Total assetsIncrease R1.165 trillion (2017)[1]
Total equityIncrease R108.308 billion (2017)[1]
OwnerBarclays plc (14.9%)[2]
Number of employees
39,988 (permanent) (2017)
SubsidiariesABSA Bank
Websitewww.barclaysafrica.com

Barclays Africa Group Limited (JSE: BGA), formerly ABSA Group Limited originally Amalgamated Banks of South Africa, is a South African financial services provider, offering personal and business banking, credit cards, corporate and investment banking, wealth and investment management as well as bancassurance. ABSA Bank Limited is a wholly owned subsidiary of Barclays Africa Group.[3]

Overview

Barclays Africa Group Limited is 14.9% owned by Barclays plc and is listed on the Johannesburg Stock Exchange.[2] The group is one of Africa’s major financial service providers offering personal and business banking, corporate and investment banking, wealth and investment management, and bancassurance.

The group was formed through a merger of ABSA Group Limited and Barclays’ African operations on 31 July 2013. The group changed its name from ABSA Group Limited to Barclays Africa Group Limited on 2 August 2013. Registered head offices are in South Africa and the group has majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania (Barclays Bank Tanzania and National Bank of Commerce), Uganda and Zambia. The group has representative offices in Namibia and Nigeria, and bancassurance operations in Botswana, Mozambique, South Africa and Zambia. Barclays Bank Kenya and Barclays Bank Botswana continue to be listed on their respective stock exchanges. Barclays Bank PLC has operations in Egypt and Zimbabwe, which are part of the African business and continue to be run by Barclays Africa Group’s management. ABSA is a signatory of the South African Financial Sector Charter.

History

See also: ABSA v Sweet
Barclays Africa Group Map
Map of Area served by Barclays Africa Group
ABSA Centre in Cape Town

ABSA was founded in 1991 through the merger of financial service providers United Bank (South Africa), the Allied Bank (South Africa), the Volkskas Bank Group and certain interests of the Sage Group.[4] The following year, ABSA acquired the entire shareholding of the Bankorp Group which included Trustbank, Senbank and Bankfin, thereby extending its asset base further. In the early years of this union, each bank operated under its own name. In 1998, they were fused into one single brand. A year later, ABSA adopted a new corporate identity and the name was changed into ABSA Group Limited.[5]

To cement the union achieved in 1998, ABSA decided to adopt a single brand and provide an array of financial services offering "simple, uncomplicated banking relationships, value for money, stability, convenience and superior customer service".[6]

In May 2005, Barclays Bank of the United Kingdom purchased 56.4% stake in ABSA as part of its drive to expand its global product and international retail and commercial banking businesses to untapped markets outside the UK.[7] Barclays called the transaction its largest investment outside the UK and the largest ever direct foreign investment in South Africa.[8]

In early 2007, the Barclays Bank acquisition of ABSA was criticised by governor of the South African Reserve Bank, Tito Mboweni who said he "had yet to see the benefits of Barclays' management of ABSA".[9]

In 2013, the group acquired the entire issued share capital of Barclays Africa Limited and issued 129,540,636 Consideration Shares to Barclays Africa Group Holdings Limited (a wholly owned subsidiary of Barclays) thus increasing the shareholding of Barclays Bank PLC to 62,3%. The Consideration Shares were listed on the JSE from the commencement of trading on 31 July 2013. The name change from “ABSA Group Limited” to “Barclays Africa Group Limited” was announced on 22 July 2013, and became effective 2 August 2013.

In January 2017, SA Public Protector Busisiwe Mkhwebane, sent a preliminary report to ABSA, the Reserve Bank, the treasury and the presidency. The report states that between 1985-1992, ABSA received extensive illegal bailout funds that amounted to more than R1.125 billion from the Reserve Bank. In the report, Mkhwebane recommends that ABSA be forced to pay back R2.25 billion, which is the current equivalent, for these unlawful financial interactions. ABSA had until the 28 February 2017 to respond.[10][11]

In March 2018, Barclays Africa announced the group's name would revert to Absa Group Limited, effective 30 May 2018.[12]

Structure

Barclays Africa Group Limited is 14.9% owned by Barclays Bank PLC, and is listed on the JSE Limited. Barclays Bank of Kenya and Barclays Bank of Botswana continue to be listed on their respective stock exchanges. In addition to the entities listed in this legal structure, Barclays Bank PLC has operations in Egypt and Zimbabwe, which are an integral part of the banking conglomerate's African business and continue to be run by Barclays Africa Group operationally.[13]

Leadership

In 2009, ABSA appointed South African businesswomen, Maria Ramos, as the Group Chief Executive. Prior to joining ABSA, Ramos was the Director-General of the National Treasury from 1996 to 2003, and the Group Executive of Transnet Limited from 2004 to 2009.

Barclays Africa Group executive committee:[14]

  • Chief Executive Officer: Maria Ramos
  • Deputy Chief Executive Officer (South African operations): David Hodnett
  • Deputy Chief Executive Officer (Rest of Africa operations): Peter Matlare
  • Financial Director: Jason Quinn
  • Chief Risk Officer: Arrie Rautenbach
  • Group Executive: Marketing and Corporate Relations: Bobby Malabie
  • Chief Operating Officer: Charles Russon
  • General Counsel: Charles Wheeler
  • Chief Executive: Wealth, Investment management and Insurance Nomkhita Nqweni
  • Group Human Resources Executive: Sarah Louw
  • Compliance Officer: Yasmin Masithela

Major shareholders

Below is the group’s 10 largest shareholders as at 20 January 2018 after the Barclays plc sell off in December 2017:[15]

Current Majority shareholders 1 May 2018 (%)
Barclays plc (UK) 14.9
Public Investment Corporation (SA) 7.75
Allan Gray Investment Council (SA) 6.61
Northern Trust Global Investments Ltd. 2.78
The Vanguard Group (US, AU) 2.61
Dimensional Fund Advisors LP 1.80
Newshelf 1405 Rf Pty Ltd. 1.54
Old Mutual Asset Managers (SA) 1.52
BlackRock, Inc. (USA, UK) 1.41
Norges Bank Investment Management 1.25
Others 57.83
Geographical holding (by owner) 31 Dec 2017 (%)
United Kingdom 54.10
South Africa 25.32
United States and Canada 11.64
Other countries 8.94

Social responsibility

In 2007, ABSA invested R60.9 million in corporate social responsibility projects.[16] The project areas include education, entrepreneurship, health and disability, and the environment.

Education

In an effort to promote its business, improve the quality of education and widen access among rural and disadvantaged communities, ABSA funds two educational programmes: the Beyers Naudé Schools Development Programme which is committed to improving maths and science grades in disadvantaged schools across South Africa;[17] and the ABSA/Sowetan Early Childhood Development Awards to support for early childhood development practitioners working in rural and disadvantaged communities.

Entrepreneurship

The group contributes to the development of entrepreneurship in South Africa by offering young entrepreneurs start-up capital, mentorship and skills training through its bank services.[18]

Health and disability

ABSA works with public benefit organizations to provide HIV/AIDS awareness, home-based care, and assistance to orphans and vulnerable children. The group also runs a number of special health projects as a joint venture with the Cancer Association of South Africa and the Walter Sisulu Paediatric Cardiac Centre for Africa.[19]

ABSA has formed a partnership with the Thabo Mbeki Development Trust for disabled people to support the empowerment of persons with disabilities.[19]

Environment

Through collaborations with organizations such as the Peace Parks Foundation, World Wildlife Fund, the Department of Environmental Affairs and Tourism, and the Department of Water Affairs and Forestry, ABSA creates environmental awareness and helps to preserve South Africa’s natural heritage.[20]

Sponsorship

ABSA sponsors a range of activities in the arts and sports sectors. It sponsors arts festival like Aardklop, ABSA Klein Karoo Nasionale Kunstefees (KKNK), and Design Indaba. The bank also sponsors various theatre productions and hosts the ABSA L’Atelier Art Competition. The top two artists at L’Atelier are given the opportunity to study at the art school, Cité Internationale Des Arts in Paris.[21]

In terms of sports development, ABSA in association with Barclays has created a high-tech sports facility for the community of Gansbaai in the Western Cape. The centre offers professional coaching in soccer, netball, basketball and cricket. ABSA has invested R4.6 million in the project.[22]

ABSA also sponsors sports teams including the national teams Bafana Bafana and the Springboks; and major sporting events such as the ABSA Currie Cup, ABSA Premiership and the mountain bike racing event ABSA Cape Epic.[23]

Bank charges

A 2008 Finweek Bank Charges Report[24] found ABSA Bank to be the most expensive bank in South Africa. A year later, the 2009 Finweek Bank Charges report[25] again not only found ABSA to charge the most for its services, but that ABSA topped the list for a second consecutive time for the biggest increase in bank charges. In 2010, ABSA was again rated by both Fin24[26] and Afriforum[27] as having the highest bank charges in the country. Increasing by 82% in pay-as-you-transact (PAYT) fees from 2005 to 2010.[26]

The 2012, Finweek Bank Charges Report ranked ABSA's Gold Value Bundle as the cheapest package option amongst the four banks that were compared. The report has also shown ABSA's PAYT pricing structure to have reduced by 25%, leaving it third cheapest in the overall ranking. The 2012 Finweek Bank Charges Report specifically applauded ABSA for the simplified nature of its pricing structures and related brochures.[28]

Mortgage loans misconduct

In 2014, South African courts made a number of rulings against ABSA's mortgage loan division in a number of summary judgements against clients who had taken out loans with the bank and who the bank had accused of defaulting on their loans. In August 2014, ABSA brought a case against James Grobbelaar and Kevin Jenzen for allegedly defaulting on their home loans. However, ABSA was unable to provide proof of the loan agreements, claiming that they had been destroyed in a fire in 2009 and instead presented an unsigned blank loan agreement.[29] In November 2014, ABSA withdrew a case it brought in the North Gauteng High Court against Emmarentia and Monica Liebenberg for allegedly defaulting on loans taken out in 2007, with the bank again trying to present blank unsigned loan agreement as proof and claiming that the originals had been destroyed in a fire. The bank was furthermore unable or unwilling to provide an electronic copy of these documents thereby weakening their case.[30]

The Liebenberg's accused the bank of trying to bully them "into submission, by threatening legal costs and expenses and by pursuing a wrongful summary judgement application knowing full well the massive disputes involved." The Liebenbergs also stated in their affidavit that the bank inflated the interest rate of the loan and charged additional fees that were never agreed to, thereby breaking the law.[30]

In South Africa, banks have to secure consent from the borrower if the bank wishes to securitise the loan. This allows the bank to bundle in the loan with other loans and sell it to new owners.[29][30][31]

Achievements and awards

The group has several banking awards, including those from Global Finance, Risk magazines.[32][32]

See also

References

  1. ^ a b c d e "Barclays Africa Group Limited: 2017 Finacial Report" (PDF). Barclays Africa Group Limited. Retrieved 1 May 2018.
  2. ^ a b Cronje, Jan (1 December 2017). "Barclays to further reduce stake in Barclays Africa". Fin24. Retrieved 9 January 2017. {{cite news}}: Cite has empty unknown parameter: |dead-url= (help)
  3. ^ "ABSA Bank". South Africa Travel Online CC.
  4. ^ "Barclays Group Archives: ABSA". Barclays Group Archives. Barclays PLC. Retrieved 28 December 2015.
  5. ^ "Better late than never for Barclays-Absa merger". Euromoney. Retrieved 31 August 2017.
  6. ^ "Archived copy". Archived from the original on 19 August 2011. Retrieved 2011-08-04. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)CS1 maint: archived copy as title (link) retrieved at 12 December 2011
  7. ^ "ABSA Group 2005 Annual Report" (PDF). 31 March 2005. ABSA Group. Retrieved 7 January 2016.
  8. ^ "Barclays seals £2.6bn Absa tie-up". BBC News. retrieved at 27 July 2005. http://news.bbc.co.uk/2/hi/business/4720687.stm retrieved May 2007.
  9. ^ "Mboweni fires confounding salvo at Barclays". Business Report. 30 March 2007. Retrieved 30 December 2017.
  10. ^ Wet, Athandiwe Saba, Phillip de. "Absa may have to pay back apartheid-era bailout billions". The M&G Online. Retrieved 18 January 2017.{{cite news}}: CS1 maint: multiple names: authors list (link)
  11. ^ "Don't Let The Politics Get In the Way Of Understanding This Explosive Detail In Mkhwebane's Absa Report". Huffington Post South Africa. Retrieved 18 January 2017.
  12. ^ "Proposed Change of Mame" (PDF). Barclays Africa Group Ltd. 1 March 2018. Retrieved 7 May 2018.
  13. ^ Barclays Africa Group. "Barclays Africa group legal structure". Barclays Africa Group. Retrieved 31 August 2017.
  14. ^ "Barclays Africa Executive Committee". Bagl. Retrieved 31 August 2017.
  15. ^ "Barclays Africa Group". 4-Traders. 21 January 2018. Retrieved 21 January 2018.
  16. ^ Absa CSI Report 2007 retrieved at 12 December 2011
  17. ^ Absa CSI Report 2007, Pg 15. retrieved at 12 December 2011
  18. ^ "Archived copy". Archived from the original on 14 November 2011. Retrieved 2011-12-19. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)CS1 maint: archived copy as title (link) retrieved at 12 December 2011
  19. ^ a b http://www.absa.co.za/Absacoza/About-Absa/Corporate-Citizenship/CSI/Health-%26-Disability retrieved at 12 December 2011 Archived 21 November 2011 at the Wayback Machine
  20. ^ "Archived copy". Archived from the original on 14 November 2011. Retrieved 2011-12-19. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)CS1 maint: archived copy as title (link) retrieved at 13 December 2011
  21. ^ "Archived copy". Archived from the original on 26 December 2011. Retrieved 2011-12-21. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)CS1 maint: archived copy as title (link) retrieved at 13 December 2011
  22. ^ Absa CSI Report 2007, Pg 70 retrieved at 13 December 2011
  23. ^ "Archived copy". Archived from the original on 23 January 2012. Retrieved 2011-12-21. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)CS1 maint: archived copy as title (link) retrieved at 13 December 2011
  24. ^ David McKay. "SA's most expensive bank: Absa". Fin24.com. Archived from the original on 19 August 2008. Retrieved 19 August 2008. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  25. ^ Fin24.com reporter. "SA outraged by bank 'fleecing'". Fin24.com. Archived from the original on 10 September 2009. Retrieved 2009-11-11. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)CS1 maint: numeric names: authors list (link)
  26. ^ a b Fin24.com reporter (27 September 2010). "SA's most expensive bank". Fin24.com. Retrieved 9 February 2011.{{cite web}}: CS1 maint: numeric names: authors list (link)
  27. ^ "Afriforum: Standard Bank and Absa is South Africa's most expensive banks". Afriforum. 3 November 2010. Archived from the original on 6 November 2010. Retrieved 9 February 2011. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  28. ^ http://finweek.com/wp-content/uploads/2013/01/Finweek-report-on-bank-charges_2012.pdf
  29. ^ a b "Smack down for Absa in Joburg High Court". ACTS. 4 August 2014. Retrieved 2 December 2014.
  30. ^ a b c "Absa gets snot-klapped in Pretoria High Court by women's army". ACTS. 30 November 2014. Retrieved 2 December 2014.
  31. ^ "Securitisation: a conspiracy of silence" (PDF). New Economic Rights Alliance. Archived from the original (PDF) on 21 September 2014. Retrieved 2 December 2014. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  32. ^ a b "Archived copy". Archived from the original on 9 December 2011. Retrieved 2011-12-15. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)CS1 maint: archived copy as title (link) retrieved at 7 December 2011
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