ABSA Group Limited

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Absa Group Limited
Public
Traded as JSE: ABG[1]
Industry Banking, Financial services, Investment services, Insurance services
Founded 1991; 27 years ago (1991)
Headquarters Johannesburg, South Africa[2]
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)
Products Commercial banking, Financial services, Retail banking, Credit cards, Private equity, Investment management, Investment banking
Revenue Increase R72.900 billion (2017)[3]
Increase R22.769 billion (2017)[3]
Increase R16.504 billion (2017)[3]
Total assets Increase R1.165 trillion (2017)[3]
Total equity Increase R108.308 billion (2017)[3]
Owner Barclays plc (14.9%)[4]
Number of employees
39,988 (permanent) (2017)
Subsidiaries Absa Bank
Website www.absa.africa/absaafrica/

Absa Group Limited (JSE: ABG), formerly Barclays Africa Group Limited, and 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 Absa Group Limited.[5]

Overview[edit]

Absa Group Limited is 14.9% owned by Barclays plc and is listed on the Johannesburg Stock Exchange.[4] 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. Its registered head offices are located in Johannesburg, 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[edit]

Map of Area served by Absa Group Limited
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.[6] 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.[7]

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".[8]

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.[9] Barclays called the transaction its largest investment outside the UK and the largest ever direct foreign investment in South Africa.[10]

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".[11]

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 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.[12][13]

In March 2018, Barclays Africa announced the group's name would revert to Absa Group Limited, effective 30 May 2018.[14] The company underwent re-branding in 2018, inclusive of a new logo and slogans.[15]

Structure[edit]

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.[16]

Leadership[edit]

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.

Absa Group executive committee:[17]

  • Chief Executive Officer: Maria Ramos
  • Group Deputy Chief Executive Officer: Peter Matlare
  • Group Financial Director: Jason Quinn
  • Chief Executive: Retail and Business Banking South Africa: Arrie Rautenbach
  • Chief Risk Officer: August van Heerden
  • Group Executive: Brand and Corporate Relations: Bobby Malabie
  • Deputy Chief Executive Officer: Retail and Business Bank: Bongiwe Gangeni
  • General Counsel and the acting head of Compliance: Charles Wheeler
  • Chief executive: Engineering Services: Charles Russon
  • Chief Executive: Wealth, Investment Management and Insurance: Nomkhita Nqweni
  • Group Executive: Strategic Services: Yasmin Masithela

Major shareholders[edit]

Below is the group’s 10 largest shareholders as at 20 January 2018 after the Barclays plc sell off in December 2017:[18]

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[edit]

In 2007, Absa invested R60.9 million in corporate social responsibility projects.[19] The project areas include education, entrepreneurship, health and disability, and the environment.

Education[edit]

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;[20] and the Absa/Sowetan Early Childhood Development Awards to support for early childhood development practitioners working in rural and disadvantaged communities.

Entrepreneurship[edit]

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.[21]

Health and disability[edit]

Absa works with public benefit organisations 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.[22]

Absa has formed a partnership with the Thabo Mbeki Development Trust for disabled people to support the empowerment of persons with disabilities.[22]

Environment[edit]

Through collaborations with organisations 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.[23]

Sponsorship[edit]

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.[24]

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.[25]

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.[26]

Bank charges[edit]

A 2008 Finweek Bank Charges Report[27] found Absa Bank to be the most expensive bank in South Africa. A year later, the 2009 Finweek Bank Charges report[28] 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[29] and Afriforum[30] as having the highest bank charges in the country. Increasing by 82% in pay-as-you-transact (PAYT) fees from 2005 to 2010.[29]

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.[31]

Mortgage loans misconduct[edit]

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.[32] 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.[33]

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.[33]

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.[32][33][34]

Achievements and awards[edit]

The group has several banking awards, including those from Global Finance and Risk magazines.[35][35]

See also[edit]

References[edit]

  1. ^ Absa Group (25 July 2018). "Absa Group". Absa Group. Retrieved 25 July 2018. 
  2. ^ "Contact Us: Head Office, Johannesburg". ABSA Group Limited. Retrieved 2018-07-11. 
  3. ^ a b c d e "Barclays Africa Group Limited: 2017 Finacial Report" (PDF). Barclays Africa Group Limited. Retrieved 2018-05-01. 
  4. ^ a b Cronje, Jan (1 Dec 2017). "Barclays to further reduce stake in Barclays Africa". Fin24. Retrieved 9 January 2017. 
  5. ^ "ABSA Bank". South Africa Travel Online CC. 
  6. ^ "Barclays Group Archives: ABSA". Barclays Group Archives. Barclays PLC. Retrieved 2015-12-28. 
  7. ^ "Better late than never for Barclays-Absa merger". Euromoney. Retrieved 2017-08-31. 
  8. ^ "Archived copy". Archived from the original on 19 August 2011. Retrieved 2011-08-04.  retrieved at 12 December 2011
  9. ^ "ABSA Group 2005 Annual Report" (PDF). 31 March 2005. ABSA Group. Retrieved 2016-01-07. 
  10. ^ "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.
  11. ^ "Mboweni fires confounding salvo at Barclays". Business Report. 30 March 2007. Retrieved 30 December 2017. 
  12. ^ Wet, Athandiwe Saba, Phillip de. "Absa may have to pay back apartheid-era bailout billions". The M&G Online. Retrieved 2017-01-18. 
  13. ^ "Don't Let The Politics Get In the Way Of Understanding This Explosive Detail In Mkhwebane's Absa Report". Huffington Post South Africa. Retrieved 2017-01-18. 
  14. ^ "Proposed Change of Mame" (PDF). Barclays Africa Group Ltd. 1 March 2018. Retrieved 7 May 2018. 
  15. ^ "Here is Absa's brand new look". BusinessTech. 2018-07-11. Retrieved 2018-07-11. 
  16. ^ Barclays Africa Group. "Barclays Africa group legal structure". Barclays Africa Group. Retrieved 31 August 2017. 
  17. ^ "Board and Management". ABSA. Retrieved 12 July 2018. 
  18. ^ "Barclays Africa Group". 4-Traders. 21 January 2018. Retrieved 21 January 2018. 
  19. ^ Absa CSI Report 2007 retrieved at 12 December 2011
  20. ^ Absa CSI Report 2007, Pg 15. retrieved at 12 December 2011
  21. ^ "Archived copy". Archived from the original on 14 November 2011. Retrieved 2011-12-19.  retrieved at 12 December 2011
  22. ^ 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.
  23. ^ "Archived copy". Archived from the original on 14 November 2011. Retrieved 2011-12-19.  retrieved at 13 December 2011
  24. ^ "Archived copy". Archived from the original on 26 December 2011. Retrieved 2011-12-21.  retrieved at 13 December 2011
  25. ^ Absa CSI Report 2007, Pg 70 retrieved at 13 December 2011
  26. ^ "Archived copy". Archived from the original on 23 January 2012. Retrieved 2011-12-21.  retrieved at 13 December 2011
  27. ^ David McKay. "SA's most expensive bank: Absa". Fin24.com. Archived from the original on 19 August 2008. Retrieved 2008-08-19. 
  28. ^ Fin24.com reporter. "SA outraged by bank 'fleecing'". Fin24.com. Archived from the original on 10 September 2009. Retrieved 2009-11-11. 
  29. ^ a b Fin24.com reporter (27 September 2010). "SA's most expensive bank". Fin24.com. Retrieved 9 February 2011. 
  30. ^ "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. 
  31. ^ http://finweek.com/wp-content/uploads/2013/01/Finweek-report-on-bank-charges_2012.pdf
  32. ^ a b "Smack down for Absa in Joburg High Court". ACTS. 4 August 2014. Retrieved 2 December 2014. 
  33. ^ a b c "Absa gets snot-klapped in Pretoria High Court by women's army". ACTS. 30 November 2014. Retrieved 2 December 2014. 
  34. ^ "Securitisation: a conspiracy of silence" (PDF). New Economic Rights Alliance. Archived from the original (PDF) on 21 September 2014. Retrieved 2 December 2014. 
  35. ^ a b "Archived copy". Archived from the original on 9 December 2011. Retrieved 2011-12-15.  retrieved at 7 December 2011

External links[edit]