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17 October 2003
Jacko Maree, Chief Executive of Standard Bank, today welcomed the publication of the Financial Sector Charter and said that the banking group was fully committed to achieving the ideals of transformation and empowerment in general and those of the Charter in particular.
"We are determined to make financial services accessible to a far larger proportion of the population than has previously been the case, while at the same time ensuring the long-term profitability of the bank and the financial sustainability of the sector.
"We believe that transformation of the financial services sector makes good business sense for the Standard Bank, for the industry and for the country as a whole," he said.
"In our view, the Charter will help to secure the continued development of the country and the long-term growth of its economy, thus achieving an economic transformation that mirrors the political transformation of which we are all so proud. I am pleased that Standard Bank has been able to play a crucial role in the development of the Charter. As a bank, we have made considerable progress already in promoting internal transformation and empowerment. Although much remains to be done, I believe we are well placed to play a leadership role in the implementation of the Charter.
"In anticipation of the formal requirements of the Charter we have established a number of forums and workgroups to address the relevant issues.
Human resource development
"We have already established a Transformation Forum, which is headed by a director who reports to me, as well as a Board Transformation Committee chaired by a board member.
"Although our past achievements from a transformation perspective have been significant, there is no question that we will need to accelerate our progress significantly in this respect, as we rise to the challenge created by new business pressures and opportunities emerging as a result of the transformation process.
"Our implementation of an employment equity programme springs more from a recognition that it is a business imperative that will sustain our competitive advantage, than from a need to comply with legislation. Standard Bank strives to equalise opportunities for all black men and women who have been socially, economically and educationally disadvantaged and is committed to nurturing an organisational culture that encourages and respects diversity.
"The bank's 'Towards Equity' strategy focused on the entrenchment of diversity and equity at all levels of employment. The results reflect a shift from 5% black representation at executive and management level in 1992 to 28% in the 2002 financial year. Total black staff representation increased from 39% in 1992 to 56% in 2002.
Procurement initiatives
"In 2002 Standard Bank placed business worth R334 million with black suppliers and service providers. The proportion of procurement from BEE companies continues to increase each year and we believe we are well placed to reach the target to which we are committed in terms of the Charter by 2008.
Enterprise development
"We recognise that Standard Bank contains a wealth of specialist skills, technical knowledge and infrastructure. We are committed to making these available to BEE companies across the economy to help build their capacity.
Access to financial services
"Standard Bank has been at the forefront in providing access to financial services to the low-income markets, and since 1994 we have extended financial services to millions of South Africans. In the low-income market we have 2,6 million active E Plan accounts, which enable these customers to perform all their day-to-day banking transactions.
"We will ensure that our 688 physical points of representation and our direct channels are optimally located, and that we are able to provide appropriate services and products in previously under-serviced areas.
"The bank is developing a sustainable lending offering for the low-income market. We intend to introduce further appropriate low-entry savings products that provide a store of value, competitive rates and incentives for sustained savings to individuals and groups. We will also use our existing infrastructure to offer the National Banking Account and National Money Transfer products as first-entry products to previously unbanked customers.
"We are investigating viable options to enable the Government to pay social grants to beneficiaries through the banking system. This will provide ease of access, safety and convenience to such beneficiaries. We already provide such a service to the Eastern Cape Social Development Department.
"The bank will continue to invest in relevant consumer education programmes that will financially empower both existing and prospective customers.
Empowerment Financing
"Standard Bank has been at the forefront in financing a number of targeted investment areas covered by the Charter. In the past seven years we have invested more than R2 billion in promoting the productive and sustainable participation of black people in several sectors of the economy. We are committed to the process of identifying and investing in transformational infrastructure using our established credentials in the infrastructure, public private partnership, energy and municipal fields. Evidence of such credentials includes our involvement as the single largest investor in the R805m South Africa Infrastructure Fund and our launch in 2000 of the $305m Emerging Africa Infrastructure Fund.
"In the SME sector, we have advances in excess of R1,4 billion to BEE companies, representing approximately 18% of total SME advances. In the home loans market, our advances to black people in all income categories amount to approximately R12 billion, representing more than 20% of the total book.
Ownership and control
"Standard Bank recognises the importance of diversifying our shareholder base to reflect the society in which we operate. We are considering various ways of achieving the requisite direct ownership in Standard Bank, while taking into account the needs of all our stakeholders, including employees.
"Two recent deals have transferred the ownership of several parts of Standard Bank's business to black people. The first of these was the establishment of Andisa Capital. This was followed by the sale of 25,2% of the Stanlib Group to a broad-based empowerment consortium led by Safika.
"There are four black people on our main board, of whom one is a woman.
Corporate social investment programmes
"Through the Standard Bank Foundation, we have invested significantly in projects that are primarily aimed at black communities. The types of projects that we support have a strong community development focus. The foundation receives a contribution of 1% of after-tax profit from domestic operations. In 2002 the foundation invested R39m in education, including financial literacy development programmes; health, including HIV/Aids awareness programmes; community development, including sports development; and youth development programmes.
Conclusion
"The Charter will change the way we think about banking in South Africa. At Standard Bank, we have a central role to play in economic transformation, while at the same time ensuring that we earn appropriate returns for our shareholders," Maree said.
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