Absa Group Ltd. and The Digital Academy today showcased solutions designed to solve everyday problems, developed by students at the academy. A course in software development is offered as a collaboration between Absa and The Digital Academy.

Since the start of the initiative in 2015, The Digital Academy has trained 380 students, 196 of whom have been placed at Absa’s technology division as interns, contract workers or in permanent posts.

“Absa has collaborated with The Digital Academy for the last five years to build the talent pipeline in the local tech industry and within Absa. Through the academy’s six-month fast-track software development training course, run twice a year, 40 to 60 students are currently being upskilled every year,” said Thabo Mashaba, Head of the People Function for Engineering Services at Absa.

“The academy offers a unique approach to rapidly building the tech talent pipeline, while creating real career prospects and skills for young people who have the passion, but not the means to pursue tertiary training,” said Mashaba.

Statistics South Africa’s third quarter 2019 Labour Force Survey indicated that the percentage of people aged 15 to 44 years who were not in employment, education or training stood at 32.3%.

“Through our collaboration with The Digital Academy, we are striving to build a much-needed pipeline of technology talent, both for Absa and the local economy,” said Mashaba.

“Currently, more than four in every ten young females are not in employment, education, or training,” which is why this collaboration with Absa is so important, said Gary Bannatyne, The Digital Academy founder.

The academy aims to bridge the technical knowledge gap between matric and work, and brings students up to speed with the latest technology being used in the rapidly changing environment.

“It bridges the gap between the technology theory that students are exposed to at school or other tertiary training courses, and the practical experience they need to succeed in a real-world working environment,” said Mashaba.

•  Deal follows the recent announcement of CDC’s initial US $75 million risk sharing facility with Absa

CDC Group plc (“CDC”), the UK’s impact investor for Africa and South Asia, has today announced at the Africa Investment Summit a US$100 million trade finance loan with Absa Bank Limited (Absa), one of Africa’s largest diversified financial services groups.

The fresh injection of finance will be deployed by Absa and its affiliates in 12 countries to support trade transactions undertaken by local businesses, African SMEs and entrepreneurs.

Trade Finance plays a key role in Absa’s strategy to become a leading pan-African bank. The investment will enable trade finance lending to Absa Group subsidiaries in Botswana, Ghana, Kenya, Mozambique, Tanzania, Uganda and Zambia, as well as other non-subsidiary correspondent banks across Africa.

This direct loan follows a recent agreement by CDC to provide a US$75 million trade finance facility to Absa. The combined sum of US$175 million is CDC’s largest trade finance commitment in Africa.

CDC’s dual capital commitment with Absa comes at a critical time for African businesses, particularly for SMEs that have suffered due to the decrease in the flow of hard currency to African banks over recent years. This can often prevent companies from taking advantage of opportunities to grow, secure export opportunities and increase employment. 

George Wilson, Head of Institutional Trade at Absa, said: “Having the CDC as a partner will significantly boost our financial commitment to drive African trade and practically support local banks, businesses, SMEs and entrepreneurs – the real source of GDP growth and developmental transformation of African economies. This is a major step in turning back the tide of African de-risking that has starved the continent of trade finance and should profoundly enhance Absa’s Trade Hub contribution to making the Continental Free Trade Agreement (CFTA) the success it needs to be.” 

Admir Imami, Director, Head of Trade & Supply Chain Finance at CDC, said: “DC now has US$850 million of commitments in place with five partner banks and has subsequently supported nearly 2,000 trade finance transactions across Africa and South Asia since 2015.

“Our commitment to boosting African trade is paramount to the economic and social development of Africa, and to addressing a US $90 billion to $120 billion financing gap to local businesses.

“Over the last few years, banks headquartered in places such as the US and Europe have reduced their exposure to Africa which has led to an acute shortage of trade finance capacity in countries in Africa that need it the most. This in turn has prevented African businesses from fulfilling their potential and taking advantage of global market opportunities.

Entrepreneurs in Africa deserve the same opportunities as their counterparts in other, more developed economies, where trade financing is much easier to come by.”

CDC partners with both international and local banks to boost levels of trade finance to their clients. The company focus on countries where raising capital is a challenge which stagnates economic prosperity. CDC is playing key role in closing the trade finance gap in Africa. This duel partnership with Absa is a considerable step in addressing this challenge.

Stimulating trade in African businesses is key to alleviating poverty where average GDP per capita stands at just US$1,930 (*NoE 3). Critical to advancing trade are the region’s businesses, yet they often face constraints in accessing finance which stagnates their growth, with trade finance a significant challenge. 

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) edged lower to 47.1 index points in December 2019 from 47.7 points recorded in November. The December figure is about one point below the average recorded through 2019. In any case, the PMI paints a bleak picture of the performance of the manufacturing sector through the year as the headline PMI only managed to edge above 50 points for two months in 2019. Bouts of load shedding and persistent weak domestic demand, coupled with more intense headwinds, from the global economy likely weighed on activity during the year.

In December, two of the major subcomponents registered fairly large declines. The new sales orders index slumped to record the lowest level seen in 2019. Part of this may stem from weaker external demand as respondents noted a drop in exports for a second consecutive month. Driven by the drop in demand, business activity also fell in December. Activity was further hampered by the return of load shedding during the month, with some respondents specifically flagging electricity disruptions as the reason for lost production time.

These declines were, to some extent, countered by smaller improvements in the three other subcomponents: employment, inventories and supplier deliveries. However, of these three, only supplier deliveries came in above 50 points with the others still pointing to a worsening of conditions.

The index tracking expected business conditions in six months’ time declined again in December after a slight improvement in November. The index fell to 45.9 from 47.4 in November. This is in stark contrast to the start of 2019, when the index was at a lofty 67.2 points. The return of load shedding likely soured expectations in December, while some may be concerned that export demand could continue to falter in the first half of 2020.

The purchasing price index rose in December to reach 65.8 index points, from 63.3 in the month before. Despite the increase, the index remains fairly low after sharp declines in October and November.

• PMI Infographic December 2019
• Absa PMI December 2019

Absa Group Ltd, one of the largest diversified financial service providers in Africa, has concluded an agreement with the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, helping Absa expand financing across seven countries in Sub-Saharan Africa.

In terms of the agreement, MIGA will issue guarantees of US$497 million to Absa. The guarantees are valid for as long as 15 years and apply to Absa’s subsidiaries in Ghana, Kenya, Mauritius, Mozambique, Seychelles, Uganda and Zambia.

The guarantees will help to protect Absa against risks related to the mandatory capital reserves that Absa and other banks are required to hold with central banks. They will free up financial capacity, enabling Absa’s subsidiaries to provide additional lending and generate more revenue. The subsidiaries will increase sustainable financing for corporates and small and medium-sized businesses, as well as projects with co-climate benefits.

“We are pleased to work with MIGA. Their guarantees allow us to provide additional financing in our subsidiaries in Ghana, Kenya, Mauritius, Mozambique, Seychelles, Uganda and Zambia,” said Jason Quinn, Absa Group Financial Director

Absa is the first African banking group to enter into this type of guarantee transaction with MIGA.

Absa Group Limited (AGL) appoints Daniel Mminele as Group Chief Executive

•           Mminele to start on 15 January 2020
•           A “forward-thinking” leader that will drive Absa’s long-term growth

Absa Group Limited (AGL) today announced the appointment of Aaron Daniel Mminele as Group Chief Executive of Absa Group, effective from 15 January 2020. Mminele will be taking over from René van Wyk, who has been leading the bank on an interim basis since Maria Ramos’ retirement in February 2019.

“We are delighted to welcome Daniel to the Absa family. He brings with him a deep understanding of the financial services industry both in South Africa and abroad,” said Wendy Lucas-Bull, Chairman of the Absa Group Board. “His unique skills set and global perspective make him a suitable leader to drive our bank’s focus on long-term growth that is digitally-led across our markets.

Absa launched its strategy in March 2018, which focused on regaining market share in core businesses. We then reconfigured our operating model and made changes to our Executive Committee to set up the business for implementation of the strategy.

“In terms of his starting point, Daniel will want to assess where we are in implementing that strategy and assess how he can play a role in strengthening the team’s ability to continue on that journey. As a leader, he will make his own assessment of what is required but he has a complete open mandate as the Group CE to lead this organisation,” said Lucas-Bull.

Mminele spent more than 20 years at the South African Reserve Bank (SARB), where he rose through the ranks to be a Deputy Governor and a member of key committees such as the Monetary Policy Committee and Financial Stability Committee. His other main responsibilities at the SARB included financial markets and international economic relations and policy.

He has represented South Africa in a number of international forums such as the G20, BRICS and the International Monetary Fund. He was also a regular participant in National Treasury’s international investor roadshow to promote South Africa.

“I am delighted to be joining the Absa group. I look forward to being part of and leading the exciting journey that Absa has embarked upon to regain its rightful place in the South African market as well as to fully establish itself as an independent African financial services group with deep roots in South Africa.”  

Before joining the SARB, Mminele worked as a banker. After completing a Diploma in Banking at Sparkasse Paderborn in Germany in 1987, he spent eight years in various roles at the Westdeutsche Landesbank Girozentrale, at its Düsseldorf and London offices. He continued his studies while in the UK and obtained various certificates from the UK’s Chartered Institute of Bankers.

He came back to South Africa in 1995, then spent about two years each at Commerzbank, working as a customer relations manager in corporate banking, and at African Merchant Bank, as a project and structured finance specialist, in Johannesburg.

“We are really looking forward to Daniel joining the Absa Group and to his leadership in driving our strategy and guiding this organization into the future,” said Lucas-Bull.

“We are also thankful to René for the job that he is doing especially overseeing the progress we have made in our separation from the PLC and the key milestones we have achieved in 2019,” she added.

Van Wyk will step down as Chief Executive on 14 January 2020, but remain with the Group as an executive director for handover purposes until 31 January 2020.  He will rejoin Absa Group and Absa Bank’s boards as a non-executive director, following a six-month cooling-off period.

For more information please contact:

Phumza Macanda

M +27 82 899 3293

Email: Phumza.Macanda@absa.africa

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 countries in Africa, with approximately 40 000 employees.

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 (Barclays 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.

For further information about Absa Group Limited, please visit www.absa.africa

The seasonally adjusted Absa Purchasing Managers’ Index (PMI) ticked down to 47.7 index points in November from 48.1 in October. The decline was broad-based as four of the five subcomponents of the headline PMI nudged down when compared with the previous month. Despite the decline, the average level of the PMI in October and November is still slightly above that recorded in the third quarter.

Worryingly, business activity slumped further in November. The index fell by 6.2 points to a multi-year low of 39.4 in November. According to Stats SA, quarterly manufacturing production contracted in the third quarter of 2019. The weak readings on the business activity index seen in the fourth quarter so far argue against a strong, if any, recovery in manufacturing output.

Demand remained under pressure with the new sales orders index not being able to hold on to all of last month’s gains. Respondents saw a decline in export demand during the month. The only major subcomponent to record an improvement compared to the previous month was purchasing inventories, which picked up from a ten-year low reached in October.

Notwithstanding the increase, the index remained well below the neutral 50-point mark. The only subcomponent to come in above 50, which generally points to improving conditions, was the supplier deliveries index.

On a more positive note, respondents turned slightly less pessimistic about the near-term future. The index tracking expected business conditions in six months’ time increased to 47.4 index points in November after recording five consecutive declines. Nonetheless, despite the uptick, the latest reading means that conditions are still expected to worsen in six months’ time, albeit less so than before.

Finally, the purchasing price index fell by a further 5.7 points after a 7.7-point decline was recorded last month. The sharp declines point to a significant moderation in cost increases. Indeed, the index fell to the lowest level since early 2018.

Absa Corporate and Investment Banking (CIB) says there are good business opportunities in some markets in sub-Sahara Africa outside South Africa where the bank has appetite to increase its agricultural lending book. Roux Wildenboer, Absa CIB Sector Head (Agriculture) says potential exists in countries such as Kenya, Ghana, Mozambique, Tanzania and Zambia.

He says a gradual improvement in both the regulatory environment and investment climate is good for the agricultural sector. Despite bottlenecks in accessing markets due to poor road and rail infrastructure, the agricultural sector is nevertheless key to economic development and job creation in these countries.

Wildenboer says he is particularly excited about the agricultural potential in markets such as Kenya and Tanzania. Kenya is famous for its tea and horticultural products, while Tanzania is a major producer of cashew nuts. Ghana is already the world’s top producer of cocoa, while Ivory Coast – where Absa does not have a presence – is a leading producer of cocoa and nuts.

“We want to have emphasis on larger presence countries where we already have operations, and this includes countries like Kenya, Ghana and Tanzania. But there is also potential in other markets such as Mozambique and Mauritius, even though the latter sugarcane industry has been suffering, particularly with increasing health awareness where the soft drinks industry and consumers are substituting sugar with other sweeteners which impacts on the sugar industry,” Wildenboer says. “Uganda is another market we want to grow as it is a country with opportunities we can capitalise on.”

Wildenboer says because agriculture still remains a predominantly labour intensive industry in many African countries where mechanisation is yet to be developed, it can provide employment opportunities for young people.

“Agriculture in Africa is by its nature labour intensive. Wherever we engage and assist with finance, the developmental spin offs is significant in terms of employment creation. For example, a viable poultry production business can have a medium size abattoir, delivering say a million chickens a week, can create between 300 and 400 jobs”.

“There is a counter that farmers will over time use technology in order to be competitive but even then, agriculture still has a large potential to create employment, as well as in all downstream businesses such as transporters, retail, parts suppliers and agents. But there is also a multiplier effect we see in agriculture and Absa wants to be at the forefront of this positive impact,” Wildenboer says.

He adds that governments can play a role by ensuring market and regulatory certainty as well as further investments in infrastructure. “The freer the market is the better, as free markets stimulate competition, technology and efficiencies. For small and medium scale producers, governments can assist by implementing sound policies to ensure the growth of sustainable businesses,” Wildenboer concludes.

• Barclays Bank of Uganda Limited renamed as Absa Bank Uganda Limited
• Barclays Bank Moçambique renamed as Absa Bank Moçambique, SA
• Subsidiaries in other countries remain Barclays; to be rebranded before mid-2020

Absa Group Limited subsidiaries Barclays Bank of Uganda Limited and Barclays Bank Moçambique were renamed Absa Bank Uganda Limited and Absa Bank Moçambique, SA, respectively, today, signalling significant progress in the group’s continent-wide rebranding programme.

The rebranding of the Ugandan and Moçambican subsidiaries also marks another substantial milestone in Absa’s separation from Barclays Plc, a process that is scheduled for completion by mid-2020.

The group-wide rebranding programme, one of the largest corporate rebranding projects in Africa currently, started with the launch of a refreshed visual identity in South Africa in July 2018 to reflect the group’s new identity as a standalone African bank.

“Today, we as Absa Group re-affirm our commitment to growth and economic development across the continent. We have a long and respected history in Uganda and Moçambique, which will serve us well for the future,” said Peter Matlare, Absa Group Limited Deputy CEO and Chief Executive of Absa Regional Operations. “By adopting the Absa name, we are leveraging our rich African heritage to drive relevant initiatives that can further unlock potential and support accelerated growth,” he said.

The rebranding programme will further unite Absa’s operations in 12 African countries behind a single identity, purpose and strategy. Absa Group’s Barclays-branded subsidiaries in Botswana, Ghana, Kenya, Mauritius, Seychelles, Tanzania and Zambia will be rebranded by mid-2020.

• United States Federal Reserve Board and New York State Department of Financial Services have approved Absa Bank Ltd application to open a Representative office in New York
• Absa expects the office to be operational and performing regulated activities before the end of the year
• Absa has already opened a London representative office in September 2018

Absa Bank Limited has received regulatory approval from both the United States Federal Reserve Board and New York State Department of Financial Services (NYSDFS), the New York State regulator, to open a representative office in New York. The office is expected to be operational by the end of the year.

Charles Russon, Chief Executive of Absa Corporate and Investment Banking (CIB), notes that the opening of the Absa Bank Limited representative office is critical to the CIB strategy to be closer to its corporate and institutional clients who invest in Africa.

“This is a significant milestone in our growth strategy. Our representative office in New York will enable us to be a globally scalable business by bolstering relationships and driving more connectivity with our global clients through Absa Bank’s independent presence in the US following our separation from Barclays,” Russon says.

James Gregory, Chief Representative for Absa Bank Limited New York, adds: “Through this office, we will be able to directly market our banking services and products to corporate and institutional clients at their HQ decision making locations. We are particularly pleased, as this is progress in our journey to become a leading pan-African CIB franchise with strong international expertise and connectivity.”

Absa has already opened a representative office in London, and will explore other locations for representative offices where the client franchise determines a need.

“Absa wants to be a key enabler of Africa’s success through these representative offices and through this and other initiatives such as the strategic MOU we announced early this year with Societe Generale, we are able to support our clients’ ambitions” Russon says.

Absa has today confirmed its sale of the Edcon store card debtors’ book to RCS Group, a subsidiary of BNP Paribas Personal Finance, subject to regulatory approvals. The transaction includes the sale of Edcon’s store card debtors’ books in both South Africa and Namibia.

“The sale is positive for Absa as it will free up capital and management time to focus on executing against the strategy that Absa announced last year,” said Arrie Rautenbach, CEO, Retail and Business Bank, Absa. “In terms of the strategy, our priority is to regain our leadership in core areas,” he said.