29 March 2020

Absa launches extensive COVID-19 payment relief programme

  • Relief for consumer, business banking and wealth customers
  • Bespoke solutions for corporate and business banking clients
  • Additional administration fees waived
  • To allow benefits to reach more customers, those who can pay are encouraged to continue payments
  • Programme applies to all Absa markets, subject to legislation, regulations and conditions applicable in each country

As South Africa and the world confront the public health, financial and economic implications of the COVID-19 pandemic, Absa Group is rolling out an extensive relief programme for eligible customers impacted by COVID-19.

“We realise that this is a difficult time for our customers and businesses whose financial means are being negatively affected. After careful consideration and engagements with regulators, we are pleased to introduce a comprehensive customer, business and corporate relief programme. This programme, effective on Monday, 30 March 2020, is in line with the principles of an industry agreed approach www.banking.org.za. We urge those of our customers who are able to continue making their payments, to do so. This will enable us to extend these measures to many more who are not in a similar position,” said Daniel Mminele, Group Chief Executive of Absa.

Eligible customers in need of short-term liquidity relief will qualify for the relief programme that applies to Absa’s credit products. These relief measures apply to Absa’s corporate, wealth, business bank, private bank and retail customers. Crucially, this programme will not attract additional administration fees for customers.

Support to corporate and business banking clients will entail solutions based on their unique requirements and operations. Businesses and corporates are encouraged to contact their relationship managers for further details.

The programme incorporates a three-month payment relief and allows customers in need of short-term financial relief to reduce their monthly instalments. Customers in good standing (with up-to-date accounts), and who have been financially impacted by the pandemic will have the opportunity to opt-in for payment relief, aimed at assisting with cash flow needs. This means the programme will give customers the opportunity to either continue paying if they are in a position to, to pay reduced instalments by agreement with the bank or to defer payments for a period of three months.

Relevant agreements will be adjusted, by revising the loan period and capitalising interest during the relief period.

“The programme is testament to our commitment to finding real, customer-focused solutions, in a time of great uncertainty for everyone,” said Arrie Rautenbach, Chief Executive of Absa Retail and Business Banking (RBB) South Africa.

The principles applicable to this relief programme in South Africa are extended to Absa’s other markets in Africa but will be implemented subject to the various conditions, laws and regulations applicable in each country.

“Absa campuses also have small and medium sized enterprises such as hairdressers, pharmacies, florists and coffee shops, among others as commercial tenants. In recognition of the role SME’s play in creating jobs and sustaining livelihoods, these businesses have been granted a rental holiday for the next three months,” concluded Mminele.

We will continue to monitor the situation closely and adjust our relief programme where necessary.

Absa Payment Relief Programme: FAQs
  • What does Absa’s Payment Relief Programme entail? What is Absa’s Payment Relief Programme?

    In line with our efforts to get closer to our customers and assist them during this difficult time, the Payment Relief Programme is a comprehensive solution that applies to our credit products, including home loans, vehicle finance, personal loans and credit cards as well as commercial asset finance and mortgage-backed business loans. These solutions cut across wealth, business bank, private bank and retail customers.

    Moreover, support to businesses is not limited to specific products – we will also consider bespoke solutions for businesses to assist them over this period, based on their unique requirements and operations.

    The programme will give customers the opportunity to either continue paying if they are in a position to, to pay reduced instalments by agreement with the bank or to defer payments for a period of three months.

    Customers in good standing (with up-to-date accounts), and who have been financially impacted by the pandemic will have the opportunity to opt-in for payment relief, aimed at assisting with cash flow needs during this time. Credit agreements will be adjusted, including a revision of loan periods, while interest will be capitalised.

  • When will the solution be available?

    On Monday, 30 March 2020.

  • Will there be different criteria for various products and businesses/individuals?

    The programme is aimed at providing instant, short-term payment relief to customers in need. Criteria will vary for business and individuals, but importantly, support to businesses is not limited to specific products. We will also consider bespoke solutions for businesses to assist them over this period, based on their unique requirements and operations. 

  • Will the relief programme also be available to Absa colleagues?

    Yes, absolutely. The same process will apply and we will contact them proactively. 

  • Why did Absa launch the programme?

    Our strategic intent is clear: We want to get closer to our customers. We realise this is a difficult time for many South Africans whose livelihoods are impacted by the national lockdown. Although we fully support government’s efforts to mitigate the impact of COVID-19, we recognise that these vital steps will have a profound financial impact on many of our customers. With South Africa and its global peers responding to contain the spread of COVID-19, this is an opportune time to show we really mean it when we say that we want to get closer to our customers and colleagues. It is against this background, that we launched the Payment Relief Programme.

  • Banks have been criticised for lack of support to date. Why did it take so long to launch this programme?

    We realise that this is a stressful time and that customers would have liked us to confirm our plans somewhat earlier. To craft a comprehensive solution that really helps our customers in a sustainable manner, we had to consider various factors. We are proud that the Payment Relief Programme is comprehensive enough to help thousands of our customers during very difficult times. 

  • What about customers under debt review?

    Customers currently under debt review will continue with their existing arrangements. 

  • What steps should customers take who would like to opt in?

    Absa will approach qualifying customers directly to discuss their payment relief options and trigger this, should they choose to opt-in to this relief scheme. You do not need to contact Absa to arrange this relief.

  • What are the benefits of the Payment Relief Programme?

    Yes.

  • Will interest still be capitalised?

    Yes. 

  • Moody’s has downgraded SA's credit rating to junk. Are you not concerned about credit risk?

    We have noted the sovereign downgrade by Moody’s Investors Service, but we want to assure our customers that South Africa's financial system remains stable. It has withstood significant challenges, including the global financial crisis of 2008/9.

    South Africa has seen heightened risk of sovereign rating downgrades during the past two years. In preparation, Absa has built substantial buffers to withstand market-wide systemic shocks such as the current event. This is why we are now able to offer the assistance program we begin offering today. 

  • How will the payment relief impact your Absa homeowners insurance?

    Where customers have opted to take up the home loans payment relief proposition, provision has been made for inclusion of Absa HOC cover in the payment relief, to ensure adequate insurance cover for the building remains. Please note that this only applies to Absa HOC paid annually from the Home Loan account and not to any insurance paid from the customer’s transactional account or that provided by another insurer.

  • Are there any administration costs for effecting the payment relief?

    Customers will not be charged administration fees for the payment relief.