Absa announced the launch of a partnership with Daily Maverick to make the risks of the global climate crisis a bigger focus of everyday life – with practical approaches on how to address them.

Spurred by the threat of Day Zero – when it was forecast Cape Town would run out of potable water – Daily Maverick decided to tackle the climate crisis head-on. What was originally intended to be an intermittent series called Our Burning Planet has become a fully-fledged unit in the Daily Maverick editorial team, concentrating on the catastrophes that happen when bad governance and climate change collide.

From travelling to rural areas to see how weather changes have transformed food production and livelihoods, to speaking to scientists and uncovering corrupt business deals that threaten healthy ecosystems, the path was clear: help South Africans understand that we are in a climate crisis, how it affects them and how we can address the key risks for the region.

Already achieving massive impact with its investigations and reporting, the Daily Maverick team has received support from Absa, who have helped fund independent research into the key climate risks for the SADC region in 2020. The relationship with Absa has grown into greater support of the Our Burning Planet effort through an annual sponsorship and grant funding.

The response to the climate crisis is everyone’s responsibility and Daily Maverick is stepping up its response with impactful investigative journalism. Partnering with corporate South Africa is essential in supporting these initiatives that stand to make a real difference to the future of the country – and planet – for us all.

“The COVID-19 pandemic has reminded us that global challenges require global coordination and brave action.  At Absa we recognise Africa’s vulnerability to climate change, and together with like-minded media partners such as Daily Maverick and their team of dedicated journalists, we hope to stimulate public debate, shift policy and contribute to creating sustainable and value-creating solutions to some of Africa’s greatest environmental challenges,” says David Wingfield, Head of Brand at Absa Group. “We are really proud to be a media sponsor of Our Burning Planet project, to bring readers the hard-hitting, impactful journalism that Daily Maverick is known for.”

“We’re excited that our vision for reporting on the climate crisis aligns with Absa’s strategic focus. We’ll be able to invest more into our already impactful editorial efforts and help showcase Absa’s support for the cause,” says Daily Maverick CEO Styli Charalambous. Of highest priority for the Daily Maverick team is getting as many South Africans as possible to fully participate in efforts to slow down and minimise the impact of climate change. “The journalism we produce will be freely available for other publishers to use because this is bigger than any one organisation’s ambition in the space,” Charalambous adds.

The partnership with Absa is built on, and with, Daily Maverick’s well-established reputation for journalism of the highest quality that maintains editorial integrity and independence in conducting all investigations. “Editorial independence is sacrosanct in all that Daily Maverick does. We are proud to enter into a relationship with a company that recognises the value of a free and independent press and one that supports our editorial vision,” says Daily Maverick Managing Editor Jillian Green.

To stay up to date with the latest investigations, reporting and developments around the crisis, readers are invited to subscribe to the Our Burning Planet newsletter, and encouraged to be part of the conversation that shapes the future of climate crisis response in the Southern African region.

CDC Group provides $50m risk sharing facility to Absa to support lending to small businesses and households through Microfinance and Non-Bank Financial Institutions in Africa 

• CDC Group’s first risk sharing facility supporting local currency medium and longer-term lending to MFIs and NBFI
• Boosts systemic liquidity in a highly credit-constrained environment and offers financial support to small businesses and households in hard-to-reach markets.

CDC Group, the UK’s Development Finance Institution (DFI) and impact investor, today announces a new $50m risk-sharing facility with Absa Bank Limited. The commitment increases Absa’s capacity to offer financing solutions to Micro, small businesses  and households across Sub-Saharan Africa through Microfinance Institutions and Non-Bank Financial Institutions (MFI & NBFIs).

This MFI and NBFI risk sharing facility is the first of its kind for CDC – supporting lending to these institutions (through credit risk mitigation) and allowing them to better serve households and small businesses across Africa. The facility will enable Absa to deploy significant sums of capital and provide vital assistance to businesses and households in need of finance, helping them remain resilient and emerge from the crisis. Moreover, the investment forms part of CDC’s COVID-19 response and boosts systemic liquidity at a critical time when commercial lending is limited due to the economic challenges brought on by the pandemic.

This investment bolsters Absa’s strategy to promote responsible lending practices among MFIs and NBFIs in its portfolio and highlights opportunities within the financial inclusion segment – sending a positive signal to commercial banks to increase their lending to this segment of the economy where considerable funding needs remain unmet.

CDC has a long relationship with Absa, Sub-Saharan Africa’s third-largest bank, and this latest investment reinforces the partnership between both institutions. This facility builds on the existing trade finance partnership, helping to enhance access to funds in the markets, facilitate increased trading of goods and services, and deepen financial inclusion among underserved communities and individuals across Africa’s markets.

Stephen Priestley, Managing Director, Head of Financial Services, at CDC Group, said: “We are thrilled to once again partner with Absa.  This is CDC’s first risk-sharing facility that provides a local currency solution to small businesses and local households. We are confident that CDC’s counter-cyclical funding will provide much needed support to local financial institutions by diversifying their funding base and enhancing their ability to provide smaller loans to local businesses and hard-to-reach communities. CDC remains committed to ensuring that businesses and people have greater access to the financial support needed to enable them to grow and remain resilient throughout the crisis.”

Anand Naidoo, Managing Executive: Client Coverage, Absa Corporate and Investment Banking said: “We are proud to have built this partnership with CDC, which does not only bring value to the relationship, but is also aligned to our overall business strategy. This facility is another proof point in the execution of our shared growth strategy which focuses on providing finance and assisting clients to achieve sustainable economic growth in the markets where we operate. 

“The framework details the use of proceeds, the process for project evaluation and selection, the ongoing management of proceeds as well as the reporting and transparency. There is a definite trend from global investors to invest in more socially responsible projects and companies because they want to see that their funds are being invested in activities that promote sustainable economic growth.” 

Absa hosted a virtual dialogue on their Art Hotspot platform to launch the debut solo exhibition by talented amateur artist and senior Absa executive, Karin Mathebula.

Mathebula, who heads Product, Sales and Service Enablement at Absa Relationship Banking, finds her inspiration in the South African landscape. Her exhibition, entitled  “Fusion of Hues”, is a collection that walks viewers through the landscapes of her youth, showcasing nature’s most brilliant and vivid colours. Juggling a challenging corporate career, Mathebula spent just over two years completing the 17 canvasses of her first art exhibition.

With this exhibition, Mathebula explored the themes of still life, beach and mountains. “I am inspired by the environment where I grew up, the sites and smells of the Underberg region of the southern Drakenberg. Even in the most barren landscape lies beauty. If you look closely, you will always find colour and  texture, and that is the beauty of life. Sometimes there are patterns that are not recognisable, but if you look closely, you will see beauty,” she said.  

During the virtual dialogue, hosted by Absa Senior Specialist Art Curator Dr Paul Bayliss, Mathebula shared her excitement about the new journey and mentioned that it has been a life-long dream of hers to be recognised as an artist. “I have been painting all my life. It’s a place I go to for refuge, to express myself and to see things in perspective,” she said.    

Absa is committed to bringing possibility to life by celebrating visual artists of all levels and backgrounds from across the African continent. “With this exhibition, we are now also bringing Karin’s possibility to life, by recognising and celebrating her unique style and skill,” stated Bayliss.

He was introduced to Mathebula in 2019 by Arrie Rautenbach, who heads the bank’s Retail and Business banking division, whilst attending Absa’s annual Champagne Festival. Bayliss immediately recognised the potential in her work and after paying a visit to her home studio,  suggested the possibility of staging a solo exhibition.   

“I was suitably impressed. The themes that run through Karin’s artwork capture the beauty and essence of the South African landscape. Karin has a very keen eye and her distinct use of colour, texture and shapes, bring her work to life,” he said.  Despite challenges brought about by the COVID-19 pandemic, Bayliss and his team worked alongside Mathebula to curate her exhibition and realise her dream.

With the pandemic altering our lives irreversibly, the so-called “passion economy”, where people monetize individuality and creativity, is fast gaining momentum across the globe. “Whether it’s playing video games, running online yoga classes, or selling niche fashion items, people are increasingly making a living by doing the things they love. Reinvent yourself, even if it means switching to a career path that gives you what you need. It’s never too late,” stated Mathebula. 

“Absa is a purpose-led organisation and it is our wish that everyone who experiences her art will come to understand what “following your passion” is all about,” concluded Bayliss.

The virtual exhibition runs until 25 August 2021.

To visit the Absa Art Hot Spot platform, click here.

To view Mathebula’s collection on the Absa Art Hot Spot, click here.

The thirty-fifth Annual General Meeting (AGM) of ordinary shareholder held as a virtual meeting via live webcast on Friday, 4 June 2021 at 10:00.

 

•  Absa AGM full speech 

The latest Absa Homeowner Sentiment Index (HSI) indicates that confidence in the South African property market has remained in line with the last quarter of Q4 2020, inching ahead 1% to end Q1 2021 at 81%.

Sentiment towards buying property has had its fourth consecutive quarter of sentiment improvement, ending Q1 2021 at 82%, the highest since the introduction of the HSI. Sentiment towards buying rather than renting also reached the highest level since the introduction of the HSI.

An emerging theme has been observed in the Q1 2021 survey – that of property renovations being leveraged to improve security. In this survey, 45% of respondents with a positive sentiment towards making renovations indicated that alterations are also an opportunity for improving security.

Sentiment towards buying property grew faster than sentiment towards selling property for the second consecutive quarter. The rally due to the low interest rate cycle on sentiment towards buying property has given way to property accumulating in value. This could be indicative of the anticipated price increases due to the widening gap between willing buyers and willing sellers.

The focus on affordability in the past few publications has been on interest rates, but what was also topical in this survey was affordability due to incidental property acquisition and ownership costs (transfer and maintenance costs). Non-property owners who prefer to rent, together with non-first time property owners have made reference to these incidental costs.

•  Absa Homeowner Sentiment Index Q1 2021 full report 

About the Absa HSI

The Absa Homeowner Sentiment Index (HSI) indicates the consumer confidence level regarding the property market in South Africa.

While understanding the overall confidence level of consumers gives us an important overall reference and hence remains important, we also measure various aspects of consumers’ confidence levels. We refer to these as “sub-indices” in this report and among these we measure sentiments about the current timing for buying, selling and investing in property.

For any questions please do not hesitate to reach out to us at  absahomeloans@absa.co.za.

Absa Group has developed a user-friendly online portal focused on providing additional opportunities for Africa’s Small, Medium and Micro-Enterprises (SMMEs) key drivers of post-pandemic growth. According to the World Bank, formal SMMEs make up 40% of GDP in emerging economies, with this number being significantly higher when informal SMMEs are factored in.

“Absa’s Procurement Market portal not only demonstrates Absa’s strategy of promoting responsible and inclusive procurement practices, but also ensures that all suppliers are aware of the bank’s service requirements; information that was not previously widely available,” comments Vusi Fele, Chief Procurement Officer at Absa Group Ltd. “What’s more, it will help us build mutually beneficial, thriving, inclusive and healthy supplier relationships.”

Absa’s goal is to promote two-way engagement and bridge the communications gap in terms of products, services, tenders and RFPs, ensuring that all relevant businesses are included. The platform will allow SMEs to access corporate supply, and at the same time enable Absa to further contribute to ongoing entrepreneurship development.

Fele firmly believes that a supplier diversity approach will assist in driving sustainability and progressively transform the bank’s supply chain. “Not only will we be able to identify suppliers that comply with B-BBEE requirements, but we will also be able to award/extend contracts to currently Exempted Micro Enterprises (EME) and Qualifying Small Enterprises (QSEs). We are also excited to welcome new suppliers to our business.”

Suppliers will be able to add their details to Absa’s database, and easily identify the procurement categories and services the bank is looking for, ranging from construction and marketing, to IT and cash management.”

In addition, qualifying SMMEs participating in the bank’s inbound supply chain become eligible for Absa’ Supplier Development Programme, which provides business support, training, mentoring, advisory and more. These businesses are also able to obtain development funding at favourable interest rates and with no or minimal collateral required, other than the committed spend contract to supply goods and services.

Fele encourages small businesses across the continent to visit the platform and sign-up. “We look forward to leveraging this portal to drive meaningful entrepreneurship development and deliver material benefits to local economic and social reform.”

The portal will be implemented across Absa’s operations, starting with South Africa next week.

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) rose to a solid 57.8 points in May 2021 from 56.2 the month before. Four of the five subcomponents remained well above the neutral 50-point mark with only the employment index dipping back into negative terrain. In all, the average level of the PMI recorded in the first two months of the second quarter of 2021 (57 points) is well above the first quarter’s average (53.8), which suggests that the sector is on track to record another quarterly expansion. A significant annual expansion is effectively guaranteed given the extremely low base set in the second quarter of 2020.

The new sales orders index regained last month’s loss and rose to 60.5 index points in May. This was despite respondents noting a dip in export sales, which means that domestic demand likely drove the improvement. On the back of higher orders, business activity increased by a robust 8 points to reach 58.8 points in May. Inventories also improved, rising to 61.4 points during the month. However, after a surprising surge in April, the employment index dipped back below the neutral 50-point mark in May.

The purchasing price index nudged down further in May 2021, albeit that 87.1 points is still an elevated level for this series (for example, last year’s average reading was 73 points). While the stronger rand exchange rate helps to alleviate some cost pressure, prices of some raw materials and intermediate goods have risen sharply during recent months. Higher electricity and fuel prices, with another diesel price hike from tomorrow, add to the upward pressure to costs. Indeed, the recent high readings of the PMI’s price index correspond to the official producer price index (PPI) data published by Stats SA, which shows a marked acceleration for not only final factory-gate inflation but also in the prices of intermediate manufactured goods.

While current business conditions improved in May, purchasing managers turned slightly less optimistic about the trading environment going forward. The index tracking expected business conditions in six months’ time dipped to 63.5 in May, down from 67.9 in April. This could be as a result of concerns over a COVID-19 third wave. Even though government has to date adopted a softer touch to lockdown restrictions, a renewed virus-induced change in spending behaviour by consumers and firms could still hinder domestic demand. The ever-present possibility of disruptive load-shedding likely also remains top of mind for many producers.
 

• PMI May Report 2021
• PMI May infographic 2021

Absa Group continues to show its commitment to addressing critical skills development as was demonstrated during the annual Digital Academy Showcase event today.

The Digital Academy has, since 2015, equipped over 400 students with critical digital skills as participants work in simulated software development environments designed to encourage digital product innovation to meet business and industry demand. One of the initiative’s key aims is to build a workforce for the future, and students undergo training in full-stack software development.

The comprehensive training, targeted at the youth and often unemployed, is based on a shared vision of impactful digital skills and resources to build Absa’s modern technology architecture, powering the bank’s digital transformation. As part of The Digital Academy learnership programme, students are required to design solutions for everyday problems. The annual Showcase event provides students with the opportunity to demonstrate their work.

Since inception of the initiative in 2015 with The Digital Academy, 440 students have been trained, with 225 (51%) placed within Absa for six months of workplace exposure. Absa currently has 120 Digital Academy graduates working in its digital, innovation and technology function. Seventy-eight of these graduates have been placed in permanent posts; 30 are on fixed-term contracts; and, 12 graduates are currently with the bank on a learnership basis.

This year, The Digital Academy will embark on two new Unemployed Learnership programmes:

• Unemployed Learnership programme with a total intake of 40 learners 
• Unemployed People Living with disabilities (PWD) Learnership with 15 learners

Unemployed Learnership programmes will result in a qualification in systems support learnership at NQF5 level.

Absa Group Chief Information Officer Wilhelm Krige said: “Embracing digital skills remains critically important as we consider our capabilities to adapt quickly to change. At Absa, we believe in investing in people who have not had the opportunity otherwise to be a part of this digital revolution, which has accelerated rapidly because of the global pandemic.”

According to the Quarterly Labour Force Survey (QLFS), for the fourth quarter of 2020, South Africa’s unemployment rate increased to 32.5%. Furthermore, the unemployment rate among youth aged 15-24 stood at a staggering 63.2 %, while for the age group 25-34, the rate was 41.2%.

Gary Bannatyne, The Digital Academy founder, said the collaboration with Absa is vital in helping to address the challenges faced by unemployed youth. “Through The Digital Academy, we can empower young South Africans with economically desirable and sustainable skills so that they have the tools to improve their circumstances.”

Each year, The Digital Academy hosts two intakes of 20 students, who undergo training for six months. The only prerequisite for joining the programme is for students to have completed Matric, to have a foundation in coding, and a passion for technology.

Skills taught at The Digital Academy

The Digital Academy is a demand-led programme that bases ‘job readiness’ on the skills required to perform value-adding work for Absa. Aside from the foundation learnership skills, the collaboration with Absa sees learners undergo comprehensive training in:

• Full stack development (creating and understanding how a full application works)
• Aside to agile development and soft skills, the development consists of: Frontend Development (HTML/Javascript/Typescript/Angular/React)
• Backend Development (Java/NodeJS/C#/Microservices/MQ)
• Database Development (PostgreSQL,MongoDb,Redis)
• Containerisation and Orchestration (Docker, Docker Compose, Kubernetes, Ansible)
• CI/CD (Jenkins, TeamCity)
• Source Control (GIT, Mercurial)
• Basic server usage and maintenance (Ubuntu administration)

The Digital Academy students create solutions for real-world problems

Each cohort of The Digital Academy students are presented with problems or scenarios which they are required to solve. The solutions developed by the latest cohort of students included:

Stoko

Problem Statement
Investing in stocks is potentially a good way to grow money. However, it is often not a friendly process for new investors. Many enter the world of stocks without basic knowledge and lose their money. How can we educate people about stock trading in an engaging and interactive way?

Solution
The Stoko application will allow users to create a demo account to trade using stock data. The users will receive a predetermined amount of stock to start. They can then buy and sell the stock in an attempt to make a profit. They will be educated with explanations of the basic terminology of stock trading, and the importance of investing in local stocks.

Fin-Knowledge

Problem Statement
Investing in stocks is potentially a good way to grow money. However, it is often not a friendly process for new investors. Many enter the world of stocks without basic knowledge and lose their money. How can we educate people about stock trading in an engaging and interactive way?

Solution
The Fin-Knowledge app is for financial institutions that are required to know the target audience for their products. The app allows users to test their financial literacy and better understand their financial literacy level. The app then provides data analysis based on people’s financial literacy so that the institution understands the current customer demographic base better.

Watercooler

Problem Statement
In the new remote working world, companies and employees are missing out on communication avenues that are available in a physical shared workspace. For example, serendipitous meetings of colleagues from other departments while at the canteen. Sharing of ideas while passing people in a corridor or elevator. The loss of a strong company bond between employees. How can we use technology to solve this problem?

Solution
Watercooler is a software application that fills up the social connection gap caused by the COVID-19 pandemic as most employees work remotely. It allows employees of the same company to connect using video and voice in rooms where people can virtually “Stand by the watercooler” and have social interactions with people that are in “that company”.

LinkSkills

Problem Statement
There is a large disconnect between the skills that people are looking for in many industries, and the skills that are being taught to people in the education sector. In the IT sector, there is constant change in skills that are required as new technologies emerge and technical demands change. How can technology be used in order to understand the demand from industry better, in order to train for these skills specifically?

Solution
LinkSkills provides a way for companies to tailor-make the skills they are looking for in people they wish to hire through a series of questions and feedback, some mandatory and some optional. This data is then analysed and is represented in a way to better understand the needs of the IT sector, in order to link the skills that are taught and the skills that are needed.

Absa Group raised US$500 million (R7 billion) in a landmark offshore Additional Tier 1 (“AT1”) hybrid capital bond issuance on 20 May.

Absa’s issuance represents the first ever US dollar-denominated Basel-3 compliant AT1 issue in the international capital markets from Africa. In April 2018, Absa priced its inaugural US$ Tier 2 capital issuance, another successful transaction which introduced the group to the international credit markets.

The 20 May transaction attracted investor demand of approximately US$3bn, more than seven times the target US$400m size that Absa had originally targeted. The overwhelming demand prompted Absa to increase its issuance to US$500m.

“Similar hybrid capital issuances have typically attracted oversubscription of around two to four times the deal size, suggesting that Absa’s AT1 issue was exceptionally well received by the international investor community,” said Deon Raju, Absa Group Treasurer. “What was particularly pleasing was the participation of over 200 global investors with the bulk of the transaction being placed with fund managers across the UK, Europe, Asia/Middle East and US, which has significantly diversified the Group’s investor base,” said Raju.

“We believe that the success of this transaction is testament to both the strength of Absa’s financial profile as well as the appeal of the South African banking sector to foreign investors, relative to other international regions,” said Jason Quinn, Absa Interim Group Chief Executive.

Following a strong first quarter trading update, the transaction was announced and marketed in virtual format, via a global investor call supplemented with a combination of individual and group meetings. More than 50 investors participated in the virtual meetings, from key centers across the globe. The positive investor feedback during the roadshow validated Absa’s confidence to formally launch the transaction on 20 May.

The issuance advances Absa’s ongoing capital management strategy, demonstrates its commitment to optimising its capital structure, diversifies its capital investor base and maintains the Group’s presence in the international capital markets.

“Absa has welcomed the pragmatic approach taken by the South African Prudential Authority in relation to Directive 2/2021, which has effectively allowed banks to access the international capital markets for AT1 capital, using terms which are closely aligned with the ZAR-denominated issuances in the domestic market,” said Raju.

Absa has been appointed as a mandated lead arranger, senior lender and hedge provider for one of South Africa’s largest Concentrated Solar Power (CSP) tower projects. The 100 MW CSP tower project, which uses molten salt technology and has 12 hours of thermal storage, will be built in the Northern Cape Province in South Africa at an estimated cost of R11.6 billion.

The CSP tower project, which is being developed by ACWA Power of Saudi Arabia, forms part of the South African Renewable Energy Independent Power Producers Procurement Programme (REIPPPP). It is believed to be one of the first such CSP project-financed transaction with molten salt central receiver technology in South Africa.

A CSP tower plant generates solar power using mirrors (heliostats) to concentrate a large area of sunlight onto a small area (the receiver). Electricity is then generated when the concentrated light is converted to solar thermal energy.

Absa’s Shaun Moodley, Resource & Project Finance Executive, says the Redstone CSP Project, to be built about 30km east of Postmasburg in the Northern Cape, will be one of the largest renewable energy investments in South Africa under REIPPPP. Moodley says Absa will participate in the overall senior debt financing package with approximately R1.5 billion of senior debt term facilities for the project.

“An important feature of the Redstone CSP project is that it will have 12 hours of full-load energy storage which will enable the CSP power plant to reliably deliver a stable electricity supply to more than 200 000 South African homes during peak demand periods, even after the sun has set,” says Moodley.

He says at least 2 000 direct jobs will be created during the construction phase, of which 400 jobs will directly benefit the local community, while over 560 jobs will be created over a period of time once the power plant is fully operational. Moodley says the socio-economic benefits of the project will also extend beyond job creation, because up to 40% of the required equipment and materials has to be procured locally.

Construction will take about 33 months. Thereafter, the power plant will be progressively commissioned to reach 100% of design capacity, which should be finally achieved over 365 consecutive days within a three-year period after the Commercial Operations Date (COD).

“Overall, one can see that this is a very important project not only from an energy perspective, but also in the form of both direct and indirect job creation. Absa is pleased to have been appointed as a mandated lead arranger for this project. We have strong appetite to finance commercially viable renewable energy projects in Africa and we have already established a track record in this area,” Moodley says.

“Absa has been a leading financier of renewable energy projects in Africa and we have so far arranged and provided more than R50 billin of financing for more than 30 such projects and we certainly have appetite for more, whether it is wind, solar PV, solar CSP, or biomass,” Moodley says.