Absa to Transform Finance and Procurement Processes in SA Following Successful Roll-out in Kenya

Absa Group says a programme that was initiated to transform finance and procurement processes as part of its digitisation journey has made significant progress as its Kenyan operations switched to an integrated, fully cloud-based solution last month. The programme will go live in South Africa next.

The programme, named Owari (signifying interconnectivity), is an initiative to ultimately standardise and transform Absa’s financial reporting and procurement processes across the 14 countries in which the group operates.

“Financial reporting and vendor processes are typically complex and onerous processes for multinational companies with legacy systems,” says John Annandale, Absa’s Group Financial Controller. “We are migrating all Absa entities onto a back-office finance and procurement template solution on fully integrated platforms, enabling us, longer term, to standardise and automate these processes,” he says.

Absa Group’s primary ledger as well as group reporting and consolidation will ultimately move to the new solution, improving controls and reducing risk by consolidating all financial data across finance, risk, and treasury functions.

The Owari programme delivered an integrated general ledger solution by integrating a SAP S/4 HANA enterprise resource planning system on AWS with Coupa, a Software as a Service (SaaS) spend management solution, in Kenya. The end-to-end solution is fully cloud-based, rather than residing in on-premises data centres. This means that the solution can be accessed online at any time from any location. Absa is increasingly adopting cloud-based computing in lieu of on-premises data centres, based on scalability, cost and efficiency benefits. 

“Establishing the new integrated solution, and as a fully cloud-based service, was a great challenge,” says Ebrahim Samodien, Chief Information Officer in the Absa Group technology office. “Many companies have struggled to transfer finance processes to the cloud as it is challenging from a data, technical and regulatory point of view. Owari was successful in Kenya as a result of the approach we took and the software and technology choices we made.”

Africa’s first certified green loan to Absa Bank Ltd, announced today by the International Finance Corporation (IFC), will increase funding for biomass and other renewable energy projects in South Africa. The loan will also support the country’s power sector and economic recovery from COVID-19. IFC is a member of the World Bank Group.

IFC will provide Absa, one of Africa’s largest financial services groups, with a loan of up to $150 million to support the bank’s strategy to expand its climate finance business and help South Africa meet its greenhouse gas reduction targets.

The loan is the first certified loan in Africa that complies with the Green Loan Principles. This means that lending by Absa for green projects will be disclosed, improving transparency and encouraging other banks to follow the principles. In addition to the loan, IFC will provide technical advice and knowledge sharing to help the bank develop a green, social and sustainable bonds and loans framework.

“Africa’s green transition requires considerable mobilization of funds,” said Jason Quinn, Absa Interim Group Chief Executive. “The agreement with IFC bolsters our funding available for green projects and strengthens Absa’s position as a leader in financing renewable projects in South Africa,” he said. Absa is the leader in arranging financing for South Africa’s Renewable Independent Power Producer Programme, having structured and arranged financing for approximately 46% of projects concluded under the programme to date.

“Financial institutions and the private sector have an important role to play helping South Africa to rebuild greener and more sustainably from the impact of COVID-19,” said Adamou Labara, IFC’s Country Manager for South Africa. “By increasing funding for renewable energy and climate smart projects we can help South Africa strengthen its climate change resilience and increase climate change adaptation.”

South Africa has set the goals of reducing its greenhouse gas emissions by 42% by 2025 and its reliance on coal by 2050. Today, 90% of the country’s electricity is generated by coal-fired plants. 

IFC estimates that there is a $588 billion investment opportunity in climate mitigation across selected sectors in South Africa between now and 2030. The project with Absa is in line with a climate initiative IFC launched in January 2020 to help financial institutions in South Africa, Egypt, Mexico, and the Philippines to mobilize private sector financing for climate mitigation and adaptation projects, and help align financial-sector strategies with Paris Climate Agreement targets.

In South Africa, financial institutions are critical sources of climate finance, with commercial banks currently providing 67% of the financing for renewable energy projects.

This is IFC’s fourth investment dedicated to green finance in South Africa’s financial sector.

Following three consecutive months of improvement, the seasonally adjusted Absa Purchasing Managers’ Index (PMI) declined slightly to 56.2 index points in April from 57.4 in March. Despite the modest pullback, the index is now about 2.5 points above the average recorded in the first quarter of the year and about 26 points above the April 2020 reading recorded during the strictest phase of South Africa’s lockdown. 

Encouragingly, for the first time since early 2012, all five subcomponents of the PMI were in positive terrain. Even the subcomponent most often trailing below the 50-point mark, the employment index, managed to increase to well above 50 in April. It is too early to tell whether this points to a sustained improvement in job creation in the manufacturing sector, but it is a positive development nonetheless.

Business activity continued to increase in April, albeit at a much slower pace compared to the previous month. The index fell back to 50.8 points in April from 56.1 in March. New sales orders remained robust, although also increasing at a slightly slower pace than in March, with the index declining from a solid 60.4 points to 58.7. Purchasing managers continued to report improved export sales. Export-orientated manufacturers could continue to benefit from the global economic growth recovery, which is expected to accelerate through the remainder of the year. Indeed, led by a booming US economy, prospects for the global economy have brightened further of late. This could, in part, explain why respondents turned notably more upbeat about expected business conditions in six months’ time. The index rose to a three-year high of 67.9 index points from an average of 58.5 points recorded in the first quarter of 2021, and a dismal 27.3 points seen this time last year. Furthermore, although the risk of a third wave of COVID-19 infections remains present, relatively low increases in new local infections during the month may have also underpinned the recovery in sentiment. This does mean that should virus metrics turn less favourable, sentiment could sour once again.

Another factor that could quell sentiment is the continued increase in cost pressures. The purchasing price index came down slightly from a five-year high reached in March, but remained elevated. The rand exchange rate strengthened slightly compared to March, which could have helped with the costs of imported raw materials and intermediate goods. However, this was countered by a sharp increase in the fuel price at the start of the month. Prices of some key input goods have also trended upwards of late and with a low COVID-induced base set in 2020, annual producer prices are set to increase markedly in the next few months.

• Absa PMI April 2021
• PMI April Infographic 2021

Absa Group Limited has appointed Deon Raju as Chief Risk Officer, with effect from 1 June 2021. Deon is currently Absa Group Treasurer, primarily responsible for the liquidity risk, funding, capital, and non-traded market risks of the Group.

He has been with Absa for more than 20 years, having held roles in Enterprise Risk, Finance, Investment Banking, Credit Portfolio Management and Global Markets. He is a seasoned banking professional with deep institutional knowledge of the Group, as well as extensive and diversified banking experience in business, finance and risk management. 

Raju is a Chartered Accountant and a Chartered Financial Analyst. He holds a BCom (Honours) from the University of Natal and is currently completing an MSc in Finance at the University of Michigan (Dearborn).

“Deon’s experience adds to the strength of the Group’s executive leadership team, and his appointment speaks to growing talent from within our Group,” said Jason Quinn, Absa Interim Group Chief Executive. 

Parin Gokaldas, who has also been with our Group for almost 20 years in a variety of senior roles, will take over from Raju as Group Treasurer. Gokaldas, currently head of Treasury Execution Services, will report to Punki Modise, who has been appointed Absa Interim Group Financial Director.

• Ms Punki Modise CA (SA), appointed Interim Absa Group Chief Financial Officer
• She becomes an executive director on the boards of both Absa Group and Absa Bank
• A seasoned banker, Modise has served Absa as CFO: Retail and Business Bank, Head: Transactional Banking, CFO: Distribution Channels and CFO: Card and Consumer Finance
• She spearheaded Absa’s R9.8 billion comprehensive Covid Payment Relief Programme

Absa Group Limited has appointed Punki Modise as interim Financial Director of Absa Group and Absa Bank, respectively. As such, she becomes an executive director on the boards of Absa Group and Absa Bank with immediate effect, subject to regulatory approvals. The announcement follows the appointment of Jason Quinn as interim Group Chief Executive on 20 April 2021.

Punki is a highly skilled banking and financial management leader with years of experience at Absa and across the financial services sector. Having joined Absa in 2008, she has played an instrumental role in leading Absa through its key strategic journeys, most notably the reset of the strategy of our largest business, RBB South Africa, in 2018, which has since demonstrated a sustained improvement in underlying momentum. She also successfully steered RBB South Africa through the pandemic and initial lockdown by leading a multidisciplinary team of experts who delivered the most comprehensive Covid-19 payment relief programme, with the highest take-up in the industry,” said Quinn.

As RBB CFO, Modise also played a shaping role in the development and execution of the current RBB strategy, launched in 2018, which has stemmed the 10-year overall business losses.

“Having worked closely with Punki over many years, I have first-hand experience of her outstanding strategic management skills, trademark enthusiasm and efficiency. I look forward to the positive contribution she will make,” said Quinn. 

Her previous roles include: Head: Transactional Banking, Chief of Staff: Retail Banking, and Chief Financial Officer: Distribution Channels. Prior to joining Absa, she held positions at Standard Bank and Fedsure, having completed her articles at PricewaterhouseCoopers Inc. 

Modise holds a BCom degree from the University of the Witwatersrand, as well as a Masters Degree in Financial Management from the University of Johannesburg. She is a qualified Chartered Accountant of South Africa.

The Absa Group Board and the Group Chief Executive, Daniel Mminele have come to an agreement pursuant to which he has stepped down as a director and Group Chief Executive and will be leaving the group with effect from 30 April 2021. The parties have not managed to achieve alignment in relation to the group’s strategy and the culture transformation journey.

Mr Mminele joined the Group as Group Chief Executive on 15 January 2020 and led the Group through the Covid-19 crisis and its response thereto. Last year, Absa delivered a comprehensive customer and client relief package, and provided support and relief to public health authorities and communities respectively across all its African markets, while delivering a resilient and respectable financial performance under difficult conditions.

“The Board was very excited about Daniel’s appointment and the positive role he was going to play at Absa. It is a matter of considerable regret that we reached this position. The parting of ways merely reflects divergent professional views and approaches, and is on a “no fault” basis. The board has conveyed to Mr Mminele its continued high regard for his competence and integrity. The parties believe that this course is in the best interests of the company and Mr Mminele. This was a very difficult decision that was not reached lightly,” said Absa Group Chairman, Wendy Lucas-Bull.

“Daniel and Absa have agreed that their interests are best served by this parting, with an appropriate separation arrangement. I would like to thank Daniel for his service, leadership and the contribution he made in a time of great challenge for the Group and society more generally during the pandemic. We wish him all the best in his future endeavours,” she said.

“It is indeed regrettable that we should have had to part ways so soon on our journey. It is, however, important for the Chief Executive to be in complete alignment with the board on critical issues such as strategy and culture. I became enamoured of the brave, passionate and ready people of Absa and wish the group well for the future,” said Daniel Mminele.

The Board has appointed Jason Quinn, Absa Group Financial Director, as the Interim Group Chief Executive with effect from 20 April.

Absa Group, one of the largest financial service providers in Africa, has launched a cloud incubator initiative in collaboration with Amazon Web Services Inc. (AWS), a leading cloud services provider, to enhance its cloud computing skills across its operations in Africa.

As one of the largest cloud adopters in Africa, Absa is promoting cloud fluency as part of its broader efforts to promote learning, experimentation and innovation across the organisation to enhance the banking experience for its customers.

By migrating to the cloud, companies can eliminate the expense of building and managing on-site data centres while gaining the ability to reduce infrastructure costs and scale up and down rather than paying for excess on-premises capacity.

“Cloud is rapidly becoming the norm for large companies, a trend that was accelerated by the COVID-19 pandemic, which prompted a step-change in digital solutions,” said Andrew Baker, Absa Group Chief Technology Officer. “Using cloud allows us to store much more data cost-efficiently, compared with physical data centres. Cloud has already improved our ability to manage and access data and will enable us to bring products to market faster.”

World Wide Worx’s ‘Cloud in Africa 2020’ report reveals that 84% of African organisations surveyed viewed cloud computing as cost-effective. Cloud investment is expected to increase significantly this year, with 56% of respondents estimating that a quarter of applications will have moved to the cloud by the end 2021, according to the report.

To support its cloud transformation, Absa has launched an internal cloud incubator programme to participate in AWS’s Skills Guild initiative, a comprehensive cloud skills training programme designed to help large enterprise organisations accelerate their cloud adoption journey and build cloud fluency for their employees. The cloud incubator initiative will equip more than 1 500 staff across Absa’s African operations with advanced cloud computing skills this year.

“The AWS Skills Guild offers enterprises a comprehensive approach to organisation-wide cloud enablement, and is designed to not only impart cloud skills, but create excitement, momentum, and accelerate paths to innovation. AWS Skills Guild is based on our experience building enterprise-wide skills transformation plans for our customers across the globe, including National Australia Bank, Deloitte, Kmart Group, and many more,” explains Chris Erasmus, Commercial Sector Leader for AWS in South Africa.

A key outcome for Absa’s internal cloud incubator participants is that they will be able to identify cloud opportunities within their businesses, and create more efficient, scalable services and solutions. Employees will have the confidence to innovate faster and experiment more to drive broadscale digital transformation across the business.

“Accelerating cloud adoption will have a significant impact on Absa’s ability to innovate, offer new value propositions, and play a meaningful role in our customers’ and clients’ experiences,” said Baker.

Proudly African bank Absa, in partnership with the South African National Association for the Visual Arts (SANAVA), officially opened applications for the 2021 Absa L’Atelier art competition, and invite young artists from across the continent to enter.

Since its inception 35 years ago, the Absa L’Atelier has showcased and continues to invest in some of the finest young artists from the 12 African countries where Absa has a presence. 

“With this year’s theme ‘The Act of Art’, we are calling on our continent’s fearless creators to act now and enter. This competition will once again provide an opportunity for visual artists to respond and make their voices heard. We are committed to putting the basic building blocks in place to ensure that young artists from across the African continent can reimagine their futures and bring their possibility to life,” says Dr Paul Bayliss, Specialist Art Curator at Absa Group.

Absa L’Atelier has built a lasting legacy, providing the next generation of young African artists with the support, recognition, and exposure they need to cement their burgeoning careers – and this year will be no different, despite the ongoing presence of the global COVID-19 pandemic.

With travel bans and country restrictions still in place, and vaccine programmes still being rolled out globally, the 2021 Absa L’Atelier Awards Programme has been re-envisioned. “The pandemic has allowed Absa to advance our digitally led approach, and the entire 2021 Absa L’Atelier will take place virtually, from online submissions to hosting a virtual awards ceremony. The adjudication process will also be live-streamed using an online platform, enabling us to lead the charge in being digitally progressive in the visual arts,” says Dr Bayliss. 

The prizes for the 2021 Absa L’Atelier winners have also been re-envisioned. “In light of the pandemic, it was agreed with the rightsholders, SANAVA, that winners will receive laptops and data and exposure to intensive virtually-hosted mentorship and masterclasses geared towards facilitating them with skills and opportunities to develop their careers.”

“This enables the winners to take up their prize irrespective of future uncertainty brought about by the pandemic. We believe it’s no longer about giving artists an amount of money but instead affording them with the skillset to develop and thrive as artists in a forever changing world.” explains Dr Bayliss.

The innovative, digitally led approach will ensure that winning artists still have access to highly skilled mentors to support them in growing their brand, teaching them the relevant skills that would best position them as they establish themselves in the industry.

Due to various COVID-19 controls, the 2019 ambassadors, as the three overall winners are called, were not allowed to travel and take up their residencies at the Cité Internationale des Arts in Paris, France, or at Future Africa, University of Pretoria nor at Nirox Sculpture Park in the Cradle of Humankind.

The three 2019 ambassadors: Nigeria’s Raji Bamidele, Tanzanian artist Winifrid Luena and South African artist Nkhensani Rihlampfu, will now have an opportunity to take up their prizes and will follow the same virtual mentorship and masterclass programme as the 2021 winners. Discussions are still underway around the prize of Phoka Nyokong, the 2019 Gerard Sekoto winner, who may still take up his residency in France at a later stage.

Multi-media artist Rihlampfu, whose work is aimed at exposing the manipulation of communication through gesture and assumption by using fantastical figures to immerse viewers in a reality founded in perception, looks forward to finally enjoying his rewards. “The Absa L’Atelier is one of the continent’s most prestigious art competitions and I was honoured to be selected as a winner in 2019.  I look forward to using all the tools and masterclasses provided by Absa to improve as an artist.  I believe this platform will give me the courage to extend my horizons beyond the borders of my native country.” 

Nyokong’s Gerard Sekoto Award is handed to the most promising emerging South African artist aged 25 to 35. This Award has been supported for more than a decade by the Embassy of France, the French Institute and the Alliance Française. He was selected for his photographic exhibition, which covered themes such as gender (mis)identity, collective social anxiety and the temporality of the human material experience. 

Nyokong encourages other artists to take up the baton for this year’s competition and benefit from the exposure that comes with being part of the Absa L’Atelier community. “Art plays an important role in the lives of many African homes and Absa L’Atelier allows all emerging artists to showcase what they can do – not only to the continent but to the rest of the world. I implore all artists to act now and enter so they too can experience what the next level of art looks like and, in the process, have a real opportunity to grow as an artist.”

The visual arts afford Absa the opportunity to play a shaping role in society by identifying, nurturing, and supporting up-and-coming artists.  “Through Absa L’Atelier, we give artists on the continent an opportunity to showcase their work and we are proud to be associated with the competition over such a long period of time,” says Dr Bayliss.

SANAVA President, Dr Avitha Sooful, also commended the enduring partnership between the two organisations and hopes to continue to impact the African visual arts scene for years to come. “Our partnership with Absa has grown from strength to strength and it bodes well for the development of African artists whose work will influence the continent’s creative economy, now and in the future.”

“With this year being our 35th year in existence, we hope to double the amount of entries from our continent’s young and fearless creators, and we call on all artists to act on their art and become part of the L’Atelier legacy,” concludes Sooful.

For further information about Absa L’Atelier competition, please visit https://latelier.absa.africa

NOTES TO THE EDITOR

Due to the continued impact of Covid-19, a re-envisioned prize will now be offered to the winning L’Atelier ambassadors.

•  A new laptop; as well as the provision of sufficient data to enable required online activities.
•  Ten virtual masterclasses with leading experts from across the globe.
• Mentorship by a leading local authority in the visual art industry – the mentor will be from the winning artist’s country of residence.
•  Winning artists will work together towards a group exhibition consisting of both individual and collaborative artworks.
• The three winning artists’ group exhibition will open in the Absa Gallery in Johannesburg, South Africa within a year of winning the prize. All materials required for putting together this exhibition will be covered, within reason, by Absa. If a physical exhibition in the Absa Gallery is not possible, the exhibition will be hosted virtually.
• In the following year, the exhibition will travel to each of the ambassadors’ respective countries.
• Each ambassador will have the option of hosting a solo exhibition by the Absa Gallery within a five-year period of winning the prize.

For more information please contact:
Liezl Squier 
Absa Group Media Relations
082 375 3554
liezl.squier@absa.africa

About Absa L’Atelier

The Absa L’Atelier is one of Africa’s most prestigious art competitions, and 2021 sees the 35th edition of the competition.

The Absa L’Atelier rewards young visual artists aged 21 to 40, with the opportunity to develop their talents abroad. This is clearly evidenced by the previous winners and the benefits and experience they attained by participating.

Artists who are citizens and permanent residents of Botswana, Ghana, Kenya, Mauritius, Mozambique, Namibia, Nigeria, the Seychelles, South Africa, Tanzania, Uganda, and Zambia and who reside in the above countries, are eligible to participate in the Absa L’Atelier and are hereby invited to enter.

About Absa Group Limited

Absa Group Limited (‘Absa Group’) is listed on the Johannesburg Stock Exchange and is one of Africa’s largest diversified financial services groups. 

Absa Group offers an integrated set of products and services across personal and business banking, corporate and investment banking, wealth and investment management and insurance.

Absa Group has a presence in 12 African countries. The Group’s registered head office is in Johannesburg, South Africa, and it owns majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa (Absa Bank), Tanzania (Absa Bank Tanzania and National Bank of Commerce), Uganda and Zambia.  The Group also has representative offices in Namibia and Nigeria, as well as insurance operations in Botswana, Kenya, Mozambique, South Africa, Tanzania and Zambia, and an International Representative Office in London and New York.

About South African National Association for the Visual Arts (SANAVA)

SANAVA is the oldest, constitutionally established, most representative, national non-governmental association for the promotion of the visual arts in South Africa, its origin dating back to 1851 when the Cape Fine Arts Society (CFAS) was established.

SANAVA promotes the visual arts, assists in the development of visual artists, and furthers international cooperation in visual arts. The organisation is also a member of the International Association of Art – a non-governmental organisation of UNESCO – with its head office in Paris, France.

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) rose for a third consecutive month to reach 57.4 index points in March, from 53 the month before. The increase was supported by an improvement in all five subcomponents relative to February. Only the employment index remained stuck below the neutral 50-point mark with the other four key sub-indices pointing to an expansion.

Promisingly, respondents reported another solid improvement in demand with the new sales orders index registering its third consecutive increase. The improvement was supported by export sales increasing relative to the previous month for the first time since October 2020. The recent better-than-expected manufacturing PMI readings in Europe support an improved local export performance. Domestic demand is likely also on the mend due to the relaxation of local lockdown restrictions from the start of the year. While it remains to be seen whether the uptick in demand is sustained in coming months, the rise of late drove a further improvement in business activity. The index registered another solid increase following a sharp improvement in February. The further rise bodes well for a continued recovery in manufacturing production. However, purchasing managers turned slightly less optimistic about expected business conditions in six months’ time. After remaining unchanged at 59.2 points in February, the index fell to 57 points in March.

Following a sharp decline in the previous month, the supplier deliveries index surged higher in March, indicating longer lead times for ordered goods to arrive. This was likely caused by continued supply chain frictions and perhaps even shortages of raw materials (as was reflected in the 2021 Q1 Absa Manufacturing Survey). However, more positively, this could to some extent also be driven by demand from manufacturers picking up by more than expected, resulting in suppliers struggling to keep up. This is also observed in some international PMI surveys. Given the uncertainty of exactly what drove supplier deliveries higher, the elevated level of the overall PMI in March may be overstating the robustness of underlying conditions in the manufacturing sector. This is notwithstanding the strength shown in some of the other sub-components.

Finally, as flagged in the February Absa PMI release, price pressure continues to build at the start of the production process. The purchasing price index rose to 89 points in March. This is a five-year high and almost 20 points above December’s reading. After a hefty fuel price increase at the start of the month, a weaker (on average) rand exchange rate and higher Brent crude oil price during the month likely contributed to the sharp increase. The prices of some key input products – such as steel and rubber – have also risen of late. 

• Absa PMI March 2021
• PMI March Infographic 2021