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African Development Bank approves R2.7 billion subordinated financing and $150 million trade finance facility for Absa Group

African Development Bank approves R2.7 billion subordinated financing and $150 million trade finance facility for Absa Group

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The Board of Directors of the African Development Bank has approved a financial package for Absa Group Limited comprising a sustainability-linked loan for an amount of ZAR 1.7 billion; an investment of ZAR 1 billion into Absa’s inaugural social bond issuance to be listed on the Johannesburg Stock Exchange; and a trade finance Risk Participation Agreement (RPA) facility for $150 million.

The intention is that the sustainability-linked loan and the social bond investment will be in the form of   Tier 2 qualifying capital for Absa. Finalisation of the financial package is subject to the conclusion of relevant legal processes. The funding will enable Absa to further expand its strategic business lending activities within the social, and sustainable financing segment.

The financing will boost Absa’s program to scale up and grow its loan book in sustainable lending activities within the small and medium sized enterprises (SMEs) segment, including for women and youth owned/ led enterprises, as well as to support increased provision of long-term affordable housing mortgage financing for female borrowers in South Africa.  Absa Group Limited is one of Africa’s largest diversified banking groups with operations in more than 12 African countries, and a strategic partner of the African Development Bank.

Absa will deploy the trade financing facility to promote access to trade financing for enterprises and increased trade facilitation for the continent, including for African low-income countries and Transition States in line with the African Development Bank’s priorities for improving trade finance access to the continent as well as promoting intra-Africa trade.

Leila Mokkadem, Director General of the African Development Bank’s Southern Africa Region said the financing marked a continuation of the institution’s long-standing partnership with Absa.

“This comprehensive financing package will unlock financing including for youth and female entrepreneurs in South Africa, as well as for underserved female borrowers in the affordable housing sub-sector in South Africa,” she noted. “This is aligned with our priorities to promote entrepreneurship and job creation, especially for youth and women and improve quality of life for the people of Africa”.

Commending Absa on the continued operationalization of its Sustainable Finance Issuance Framework and commitment to sustainability, Ahmed Attout, the African Development Bank’s Acting Director for the Financial Sector Development Department, said the collaboration further demonstrated the Bank’s commitment to strategically drive innovation and to mobilize and channel funding including through debt capital markets towards key sectors and segments of the economy.

“We are pleased to see the agreement coming to fruition, enabling Absa to increase sustainable lending, launch our first social bond and enhance our work in closing the trade financing gap that currently exists in Africa. The financial close of this agreement will support our ambition to be an active force for good and strengthens our relationship with African Development Bank,” said Parin Gokaldas, Absa Group Treasurer.

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Our Voices

Group Data Privacy

Group Data Privacy

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Know your data privacy rights

Absa is committed to handling all personal information in the right way, for the right reasons, and to treating our customers, employees and third parties’ personal information with care and responsibility. We are also committed to ensuring that individuals whose personal information we collect, and process are aware of their rights to access their personal information.

Access to information is enshrined in the Promotion of Access to Information Act, which also stipulates that people can exercise their constitutional right of access to any of their personal information held by us. It is also the cornerstone of transparency and accountability on our part.

Other rights that data subjects have are:

  • The right to update their personal information.
  • The right to request access to their personal information.
  • The right to object to the processing of their personal information.

Make data privacy and access to your personal information your business. Get informed.

For more detailed information on your data privacy rights visit you country Privacy Representative or visit the absa privacy statement

 

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Driving meaningful change through sustainable transformation

Driving meaningful change through sustainable transformation

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By Jeanett Modise, Chief People Office, Absa Group

The emphasis on rights and equality in the workplace has never been more pronounced and important than it is today. We are living in a time where diversity, equality and inclusion is at the forefront of conversations taking place both in, and outside, of the boardroom.

Interestingly, as we celebrated Women’s Month, the gender agenda was in focus on the sports field as the Netball World Cup in Cape Town and the 2023 Women’s Soccer World Cup in Australia ignited debate around gender equality in sport. While these competitions sparked as much frenzy and excitement as men’s sports, issues around the unequal pay for women players versus their male counterparts, inadequate sponsorship of women’s sports and televised sports time came to the fore.

For many of these women who are professional players, they still require a full time job in order to sustain themselves and their families while their male colleagues can fulfil their professional passion on a full time basis, with full pay.

It is now widely recognised that there needs to be more investment into women’s sports if women are to compete on an equal footing with men. And the same can be said of the challenges women face daily in corporate environments and other sectors of society.

It is incumbent on us as business leaders to recognise that women form the backbone of our society, and to create opportunities to ensure that they are able to extend this role into the workplace.  At Absa, we believe in equal opportunity for all and actively seek to encourage diversity in the work environment because we know that diversity drives creativity and harnesses the power of our differences.

In line with this, we made the decision in 2021 to adopt the month of August as Women’s Month for all of Absa. We use this month to reaffirm Absa’s commitment to the gender agenda, communicate the significant progress made on our commitments and to celebrate our colleagues.

This celebration is important. While our journey to date has not been without its challenges, we believe that creating opportunities for women in the workplace requires a concerted effort where we focus on building  psychological safety and break the unconscious biases that exist. ​This is significant as it will enable conscious decision making across all processes.

We are making strides in achieving change; strides that are being acknowledged externally with Forbes ranking Absa as a top African organisation championing women at work, achieving 36th place out of the 400 international companies listed.

We take our role to accelerate the advancement of women, both within Absa and externally in all our markets where we operate, demonstrating our commitment to being an active force for good, seriously.

The introduction of a range of women focussed initiatives across the Group aligned to our Women’s Manifesto including the Absa Ignite Her, Women Empower Her, Women in Tech, and Women in Risk, have yielded key successes. With the Ignite Her programme launched in 2019 we have trained over 600 women colleagues with a further 60 currently enrolled. In addition over 3 000 male and female colleagues have benefited from the Ignite Her masterclasses, which remain open to all colleagues. To date, the programme has delivered about 4% higher promotion rates, around 3% higher lateral mobility rates and approximately 9% higher retention rates of programme alumni compared to non-participants.

Overall, in 2022 we celebrated over 64% of all promotions in Absa being awarded to women​ as well as more than 50% of all new appointments being women. Critically, these improvements are being made across the board with 44% (2021: 42%) of promotions directed to females at senior management and 56% (2021: 54%) and 76% (2021: 66%) of promotion opportunities within middle and junior management, respectively, directed to women. These are key achievements when we look at ‘future proofing’ our gender parity.

Pleasingly our African regional operations have also progressed with increased representation from 33% to 35% at senior management levels, with a slight increase to 40% (39.7% in 2021) at middle management levels.

We are seeing these changes reflected across the continent with the World Economic Forum 2022 Global Gender Gap Report showing that Sub-Saharan Africa has the sixth-highest regional score and has bridged 67.9% of its gender gap, registering its highest gender gap score in 16 years. Looking at the continental achievements, Namibia ranks 8th and South Africa 20th out 146 countries surveyed.  At the present rate it would take 98 years to close the gender gap in the region, a gap which we are looking to close far sooner.

Is it enough though? No, not yet. Our role as a significant contributor both locally and across the African continent means we have a pivotal role to play in not only changing our business but in affecting change on a large scale. Change that will enable a future where the question of gender representation will no longer be relevant.

We are committed to addressing the shortcomings of the past that resulted in under-representation of women in leadership responsibilities in our organisation. As such, our diversity and inclusion criteria are included on our leaders’ performance scorecards to ensure continuous improvement in representation across all management levels. These are in place across each of the countries we operate in.

As an organisation, we have laid a strong foundation and we are now poised to scale our efforts and create sustainable transformation – we have the appetite to drive knowledge, and support to enact change to create a gender-inclusive environment.

 

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Zero Emissions Day – let’s walk our talk together

Zero Emissions Day - let's walk our talk together

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A note from Punki Modise, Group Chief Strategy and Sustainability Officer, to all Absa employees

Today marks Zero Emissions Day, a global celebration dedicated to raising awareness about the impact of carbon emissions on our planet. I invite you to join me, along with fellow environmentally conscious people all over the world, in taking a closer look at how we can change our daily energy habits to reduce harmful emissions, give the Earth a chance to breathe again, and help to avoid the worst impacts of climate change.

Zero Emissions Day draws attention to the challenges created by global carbon emissions and encourages us all to assess and minimise our individual contributions. With each of us playing our part, we can help to accelerate the global journey to decarbonisation.

As individuals, we can take action by walking or cycling more, taking public transport, or carpooling if these opportunities are open to us, or perhaps choosing a vegetarian meal. But we can also make a contribution as a team, which Absa is doing.

At a company level, we are proud of the significant sustainability strides the Absa Group has taken. Our long-term ambition is to reach Net Zero by 2050 for scope 1, 2, and 3 emissions. We prioritise business activities that have the most positive environmental, social, and economic impact while reducing negative impacts.

Absa’s target is to reduce operational emissions by 51% from 2018 levels by 2030. We have achieved an overall reduction of 21.3% to date. As a bank, we also have an important role to play in financing sustainability. We’re planning to mobilise a cumulative R100-billion of sustainable finance by the end of 2025. Our Relationship Banking unit in South Africa aims to finance R2.5 billion of embedded renewable power by 2025. We expect our renewable energy lending to increase at a compound annual growth rate of 26% by 2025, doubling the lending commitment over the period.

While we recognise Africa’s particular vulnerability to climate change, our approach to Net Zero also takes cognisance of the development needs of Africa’s people. Our Net Zero declaration underpins our belief in and support for a Just Transition. The transition to a resilient and sustainable economy must be inclusive and equitable for communities, investors, and industries and, most importantly, leave no one behind.

We are committed to entrenching environmental, social and governance (ESG) principles throughout our business as we believe that ESG is vital for delivering real long-term value and our purpose of empowering Africa’s tomorrow, together… one story at a time.

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Absa Group Wins Accolades for Excellent Integrated Reporting

Absa Group Wins Accolades for Excellent Integrated Reporting

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The Absa Group Integrated Report 2022 was recognised in the Top 10 Integrated Reports among the JSE Top 100 listed companies in the EY Excellence in Integrated Report Awards this month.

‘Excellent’ reports have a clear strategic focus, an emphasis on value creation and a high level of connectivity between the various elements presented, and consequently a coherent value creation narrative, according to EY.

“Absa’s report focusses on value creation and contains an appropriate mix of forward-looking information and performance disclosures. The explanation of the basis of preparation and presentation of the report is suitably detailed and supported by an explanation of the extent to which the report has been assured. A wealth of useful, well contextualised, and clearly explained data is provided within the report and the extensive use of cross referencing makes the report easy to navigate. We particularly liked the context provided by the comparison of the group’s position relative to its most significant peers in each country within which it operates. The materiality determination process is comprehensively explained, and the material matters are unpacked and linked to risks, opportunities, strategy, stakeholders, and their impact upon the business model. The section that deals specifically with the outlook for the group is excellent,” according to EY.

The accolade recognises Absa’s continuous efforts in striving to outperform on investor communications.

Absa’s efforts in this regard have further been acknowledged by the International Finance Corporation (IFC) through its selection of certain of Absa’s integrated reporting disclosures (2022 and 2021) to feature on its Disclosure and Transparency Platform (a platform for international best practice disclosures). www.ifcbeyondthebalancesheet.org

An integrated report is a concise communication about how an organisation’s strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value over the short, medium and long term, according to the IFRS Foundation, a public interest organisation established to develop high-quality, understandable, enforceable and globally accepted accounting and sustainability disclosure standards.

In March, Absa investor relations was voted top among all listed South African companies in the 2023 Intellidex Top Investor Relations survey. The accolade recognises Absa as the leader in investor relations. It was the tenth consecutive rating where Absa was voted first in South Africa for investor relations across all companies, after being first for eight consecutive years in the global Extel ratings from 2012 to 2019 until that survey stopped.

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Our Voices

Absa Implements one of the Largest B-BBEE Transactions

Absa Implements one of the Largest B-BBEE Transactions

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What it means for Absa, beyond B-BBEE

Author: Arrie Rautenbach, Absa Group CEO

As a bank, we constantly strive to play our part unlocking the significant economic potential of the African continent by being an active force for good in everything we do. The implementation of our Broad-Based Black Economic Empowerment (B-BBEE) transaction on 1 September is a powerful affirmation of this commitment, as we build a diverse and inclusive organisation, not only in South Africa, but also our operations across the continent.

The transaction, which has been in the making for some time, is one of the largest B-BBEE transactions to be implemented in recent times. It is significant numerous ways, not only as it should enable us to sustainably exceed the ownership threshold set out in the Financial Sector Charter, but also because it will have a meaningful positive impact for the two beneficiary groups, being our employees and beneficiaries of the Corporate Social Investment (CSI) Trust.

The transaction is significant also as it is launched at the right time. Having refined our Group strategy, operating model and corporate purpose commitment over the past two years, we are building momentum in the work we are undertaking collectively to enhance our culture across the Group. The sense of progress and a clear path ahead have seen employee engagement rise to levels not seen before.

Our B-BBEE transaction will embed a broad ownership culture across the business, and this will further bolster the effort to achieve the culture shift that will allow us to drive better outcomes, for the Group, for our customers and for our shareholders too.

The transaction involves 7% of the enlarged Absa Group shares in issue, comprising 3% for employees in South Africa and 4% for participants in a CSI Trust. A cash-equivalent component for our employees in the 14 other countries where we have a presence will be implemented, subject to local approvals.

The transaction design is firmly rooted in the principles of diversity and inclusivity as we sought to recognise the contribution that every one of our employees makes to the success of the Group. While no one is excluded, those who were most disadvantaged in the past, will receive the biggest benefit.

The evergreen CSI Trust will operate for the benefit of a broad range of beneficiaries from previously disadvantaged communities across South Africa. The CSI participants will be selected by the trustees and reviewed annually. The CSI Trust will focus on education and youth employability.

Importantly, we structured the deal in such a way as to enable free participation by employees and beneficiaries of the CSI Trust. This is in line with our social commitment to ensure that stakeholders are not excluded due to financial constraints. Our B-BBEE transaction has been designed in such a way that there is only upside for the beneficiaries, and no personal financial risk.

An important feature of this transaction is that economic benefits will be timeous and tangible for our CSI beneficiaries. We were deliberate in avoiding a transaction with extended lock-in periods and long waiting periods for dividends to cover funding commitments.

In keeping with our commitment to being a purpose-led organisation, it gave us great pleasure to launch a transaction that will enable our employees and communities to participate in Absa’s growth across Africa. This is aligned to our commitment to being an active force for good, promoting transformation, diversity and inclusion.

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Absa Joins Forces with Nelson Mandela Legacy Ride4Hope in Fund-Raising and Education Initiatives

Absa Joins Forces with Nelson Mandela Legacy Ride4Hope in Fund-Raising and Education Initiatives

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Absa, a leading financial services provider in Africa, is once again proud to announce its collaboration with the 2023 Nelson Mandela Legacy Ride4Hope cycling event, which takes place from 20 to 23 September 2023. The primary objective of the event is to raise funds for community development and to spread a message of hope inspired by the late former President Nelson Mandela.

The Nelson Mandela Legacy Ride4Hope is one of many events mandated by the Nelson Mandela Foundation to mark the centenary commemoration of South Africa’s first democratically elected president.

The four-day cycling event covers a total distance of 550 kilometres through the provinces of Gauteng, Free State and KwaZulu-Natal. Thirty Absa participants are joining the ride as part of Absa’s commitment to the initiative. Among the riders are members of Absa’s #SheUntamed community, who promote diversity and inclusion in cycling. #SheUntamed is an Absa initiative for women in cycling.

As part of its contribution to the initiative and aligned to its ambition to be an active force for good, Absa facilitated the extension of education facilities in Soweto, former President Mandela’s home between 1946 and 1962 and the starting point for the cycling event. Isaacson Primary School, one of the beneficiaries of Ride4Hope, was upgraded with the addition of classroom, office and storage facilities.

The journey began today (20 September) at the historic Vilakazi Street in Soweto. Riders will pass through Standerton, Newcastle and Ladysmith before reaching their final destination at the revered Nelson Mandela Capture Site in Howick on 23 September. Riders will contribute to the effort to leave a legacy in the towns visited during the ride, the fourth year of the event.

“This partnership delivers real impact corporate citizenship in the form of community development, education and empowerment,” said Stephen Seaka, Absa Group Managing Executive: Public Sector and Growth Capital Solutions. “This is one of several initiatives created by Absa to drive transformation, diversity and inclusion and it is part of Absa’s ambition to be an active force for good in everything we do.” said Seaka.

 As cyclists embark on the remarkable journey, members of the public and communities are invited to join in celebrating the indomitable spirit of Nelson Mandela, whose legacy continues to inspire hope, unity, and progress.

To find out more about Ride4Hope, visit https://legacyride4hope.com/ or Legacy_ride4hope on Instagram.

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Absa Extends Cape Epic Title Sponsorship for Three Years

Absa Extends Cape Epic Title Sponsorship for Three Years

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Absa renews its commitment to supporting the world’s premier mountain bike stage race and to growing women participation in cycling.

 Cape Town, 14 September 2023 – Absa, a leading financial services provider in Africa, is pleased to announce the extension of its title sponsorship of the Absa Cape Epic, the world’s premier mountain-bike stage race. The extension solidifies Absa’s long-standing position as the primary sponsor of the iconic event, which has come to be known as one of the world’s toughest mountain-bike races.

The agreement was signed by Absa Group Chief Marketing and Corporate Affairs Officer, Sydney Nhlanhla Mbhele, and Senior Vice President & Managing Director EMEA at The IRONMAN Group, Thomas Veje Olsen, in Cape Town on 14 September, just ahead of the Absa Cape Epic 2024 route launch event on the same day. The agreement secures Absa’s position as title sponsor until 2027. The 20th edition of the Absa Cape Epic is scheduled to take place from 17-24 March 2024.

“We are delighted to extend our sponsorship of this premier event for a further three years,” said Sydney. “Through our near 19-year journey as title sponsor of the Absa Cape Epic, we have witnessed the incredible evolution, growth and success of the event and we are proud to be associated with the Cape Epic. The enduring partnership between Absa, a purpose-led pan-African bank, and Cape Epic is testament to our shared commitment to elevating an iconic sports event while at the same time leveraging our potential to be an active force for good. This partnership delivers real impact among riders, corporate citizenship in the form of community development, education, and women empowerment.”

The eight-day event and preparation months prior to the start have a significant economic impact as local communities and businesses host 1,360 local and international riders, thousands of spectators and event staff along the 700 km route through villages, towns and cities.

“The Absa Cape Epic has become the pinnacle event it is, thanks largely to the backing of Absa,” said Thomas Veje Olsen. “Absa’s commitment and support has not only had a monumental impact on South African mountain biking but more importantly on local communities. We thank Absa for their unwavering commitment and dedication to our event, as well as initiatives like #SheUntamed, which we are immensely proud to be part of.”

The Absa Cape Epic, often referred to as the ‘Untamed African MTB Race’, has gained international acclaim over the years, attracting the world’s top riders and enthusiasts from around the globe. The race presents a unique opportunity for participants to challenge themselves against the breathtaking backdrop of South Africa’s diverse landscapes while promoting community development and sustainable tourism in the region.

As part of Absa’s strategic ambition to be an active force for good in everything it does, Absa has actively promoted women participation in the Absa Cape Epic through its #SheUntamed initiative since 2019. The number of women participating in the race, one of the world’s toughest, has increased from 36 in 2019 to 146 in 2023, in large part due to Absa’s purposeful efforts, alongside Cape Epic.

“Transformation, diversity and inclusion is a core value at Absa and one that we seek to promote throughout our organisation and our sponsorship estate,” said Sydney. “It is inspiring and rewarding to see women participation in this challenging event grow each year.”

Absa’s steadfast support of the Absa Cape Epic demonstrates the organisation’s dedication to fostering a spirit of adventure, camaraderie, and healthy competition among riders. The partnership extends beyond the race, contributing to the growth of mountain biking as a sport and promoting the conservation of South Africa’s natural beauty.

The Absa Cape Epic is not only a showcase of elite athleticism but also a celebration of the human spirit’s indomitable will to conquer new challenges. As Absa looks forward to the future, it aims to continue empowering riders, communities, and volunteers alike, making a lasting impact on the world of mountain biking and the broader South African community.

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Absa Employees Celebrate Launch of Landmark B-BBEE Transaction

Absa Employees Celebrate Launch of Landmark B-BBEE Transaction

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Absa employees across the continent celebrated the launch of the Group’s landmark Broad-Based Black Economic Empowerment (B-BBEE) transaction on 1 September 2023, underscoring the Group’s commitment to transformation, while enabling employees and communities to participate in the value generated by the Group.

The transaction, one of the largest B-BBEE transactions in recent times, will also include  beneficiaries of the Corporate Social Investment (CSI) Trust, making a meaningful difference in the lives of thousands of people who might not have access to education and employment opportunities.

While black employees in South Africa, as defined in South Africa’s B-BBEE codes, will be the primary beneficiaries, the transaction recognises the contribution by all employees across the Group. Absa employees in South Africa will be awarded free shares while Absa employees in the 14 other countries in which the Group operates will be able to participate in a cash-equivalent programme, subject to local approvals.

“The transaction is the next big step in our journey to building a diverse and inclusive organisation and it demonstrates our commitment to being an active force for good in everything we do,” said Absa Group CEO Arrie Rautenbach, who addressed employees participating in celebration events across the continent today.

The transaction involves 7% of Absa Group’s total shareholding, valued at approximately R11.2 billion.

All of Absa’s approximately 26 000 eligible employees in South Africa will be awarded shares, vesting in five years. Black employees will receive an additional 20% allocation.

A CSI Trust will manage funds flowing from the transaction to benefit black communities in South Africa.

“As a leadership team, we are delighted to deliver the transaction particularly to employees who will be able to participate in the value that they help generate every day,” said Rautenbach.

Absa Group CEO Arrie Rautenbach addresses Absa employees at a Sandton rooftop celebration on Friday, 1 September.
Absa Group CEO Arrie Rautenbach addresses Absa employees at a Sandton rooftop celebration on Friday, 1 September.
Absa B-BBEE Launch 2
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Absa Purchasing Managers’ Index August 2023

Absa Purchasing Managers’ Index August 2023

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The seasonally adjusted Absa Purchasing Managers’ Index (PMI) improved somewhat in August, rising by 2.4 points to 49.7, i.e., to just below the key 50-point mark. The increase in the headline PMI was driven by the business activity index, which jumped by almost 12 points to 50. This follows a large decline of almost 11 points in July. Although the magnitude of the rise in business activity gives an impression of some strength here, at 50, the index is pointing to flat month-on-month manufacturing output growth in August.