BL Premium reports that Absa is considering a second broad-based BEE (BBBEE) scheme to make a more meaningful contribution to transformation in the financial services sector.
The bank said on Wednesday that its proposed new BBBEE scheme could constitute up to 8% of its issued share capital. That would equate to about R9.5bn for a deal that is expected to include third-party investors and staff. “While it is aligned with the SA government’s BBBEE objectives and with the commitments contained in the financial sector code, we will also extend the offer to include employees across our operating markets,” Jason Quinn, Absa’s interim CEO, advised. The government has been growing ever more vocal about transformation in the financial services sector in recent years. Absa first concluded a significant BBBEE transaction in 2004 when it allocated a 10% shareholding to black empowerment consortium Batho Bonke. As part of its subsequent separation from Barclays Plc, Absa announced it would undertake a new BBBEE transaction in line with its transformation efforts. In September 2017, that saw Barclays transfer 1.5% of its shareholding in Absa to an interim structure called the Absa Empowerment Trust. Since then the dividends received from the bank by the Trust have been used to purchase additional equity in the group, boosting the initial stake to about 1.9%. It is envisaged that these shares will form part of Absa’s new BBBEE deal. Absa was forced to put the proposed BBBEE deal on hold in 2020 due to the Covid-19 pandemic. However, improved market conditions have allowed the bank to restart work on the BBBEE deal just as the government exerts increasing pressure on financial services firms to transform. Absa is expected to publish the terms of its new BBBEE deal later this year, with implementation scheduled for 2022.
- Read the full original of the report in the above regard by Garth Theunissen and Karl Gernetzky at BusinessLive (subscriber access only)
Get other news reports at the SA Labour News home page