Absa Group Limited (AGL) announces changes in Executive Committee

Experienced investment banker, Charles Russon appointed Chief Executive of Corporate and Investment Banking
Paul O’ Flaherty steps down from Board, joins the Group Executive Committee as Chief Executive: Engineering Services
Absa Group Limited today announces the appointment of Charles Russon as the new Chief Executive Officer (CEO) of Corporate and Investment Banking, and Paul O’Flaherty as Chief Executive: Engineering Services. Both appointments are effective 5 November 2018.

The appointments are both subject to regulatory approvals.

The appointments are a significant step forward in the Absa Group’s implementation of its new operating model that was announced in April, with four core businesses, each headed by a chief executive. These are Retail and Business Banking (RBB); Corporate and Investment Banking (CIB); Rest of Africa; Wealth, Investment Management and Insurance (WIMI).

Russon has had a long career in corporate and investment banking with global and local exposure. He worked for Merrill Lynch and Deutsche Bank in Europe before joining Absa Capital as CFO in 2006. He later became CIB Chief Operating Officer (COO) before taking up a role as Regional Head of Finance for the Group in 2012.

Russon has been a member of the Absa Group (previously Barclays Africa Group) executive committee since January 2014. He is currently the Chief Executive for Engineering Services, and his responsibilities include overseeing the group’s technology infrastructure, data and security.

The bank has also appointed Paul O’Flaherty as Chief Executive for Engineering Services, and he will join the Group Executive committee. O’Flaherty will step down from the Board, of which he has been a non-executive director since January 2016. As CE of Engineering Services, O’Flaherty will be responsible for Technology, Data, Security, and the Separation program.

O’Flaherty was most recently Chief Executive Officer of Al Naboodah Group Enterprises in the United Arab Emirates. He is also a former Chief Executive Officer of ArcelorMittal South Africa and Finance Director of Eskom.

“I am pleased that we have appointed two highly experienced executives in roles that are critical to how we take our new strategy forward. Our CIB business is an important driver of our growth ambitions across the continent while engineering services is central to the transformation of our business into a digitally-led bank in line with our strategy,” said Absa Group Chief Executive Officer, Maria Ramos.

Absa Group Limited, which has operations in 10 countries in Africa, opened the first of its branches bearing the refreshed Absa brand in South Africa today. This signals the start of a new chapter for the group and a major rebranding project in Africa.

Absa is no longer primarily a South African brand. Absa is now a multinational financial services group, representing banks in 10 countries, as it separates from the Barclays group. The new brand design is an expression of Absa’s new identity and purpose, which is ‘bringing your possibility to life’.

“This is an exciting time as we create a new Absa with a new brand design, fit for a forward-looking bank in a digital era,” said Maria Ramos, Absa Group Chief Executive Officer. “As we revitalise Absa, we are updating and refreshing entire network across South Africa over the next year or so.”

Absa is updating its branch set-up in line with its new strategy to be ‘customer obsessed’. The updated look is also more approachable, more dynamic and more vibrant with a wider spectrum of colours.

The first phase of rebranded Absa bank branches were revealed today at more than 30 key locations across the country. Other branches and assets, including buildings, forms and digital platforms are also being updated to reflect the new brand design.

Absa intends to rebrand its operations across Africa, most of which currently use the Barclays brand, by 2020, including more than 1,000 branches and 10,000 ATMs.  The project will likely be one of the largest rebranding programmes in Africa at this time.

The rebranding programme will not affect customers’ product of service functionality.

As Absa updates its branding, it is important for customers to be reminded that Absa will never contact them directly via phone calls (vishing) or emails (phishing) to request sensitive information such as their card PIN, card CVV or online banking password.

Absa will also never request customers to access their online banking profile via hyperlinks or attachments provided in an email and customers are reminded to carefully read security messages before accepting or rejecting them.

Customers who are concerned that an sms, email or call received may be fraudulent can contact the Absa Fraud Hotline on 0860 557 557.

Following recent press reports relating to Barclays Africa’s role as financial adviser on the sale of 9Mobile, Barclays Africa wishes to clearly state that these reports are inaccurate. This is not surprising, having come from so-called “sources” without authoritative knowledge of the process.

Barclays Africa has full faith and confidence in the fairness and transparency of the process it has run to date.

Contrary to media speculation, Barclays Africa has also not resigned its mandate in the transaction and remains committed to a speedy and satisfactory conclusion of the process.

The role companies can play in fostering education, helping governments meet their goals and contributing to economic growth across the continent was in the spotlight at the University of Free State, in Bloemfontein, on Tuesday, 26 September 2017. The University, in partnership with the Oliver & Adelaide Tambo Foundation and Absa, hosted a high-level dialogue session to discuss opportunities and education challenges facing, not only South Africa, but the African continent as a whole.

The dialogue, titled “Educating Africa’s Future”, was part of a series of debates which aim to unpack a range of socio-economic issues affecting South Africa’s, and the rest of the African continent’s development.

Panellists included Dr Pali Lehohla, South Africa’s longest-serving Statistician-General. The discussion was attended by various stakeholders, including academics, students, business and political leaders, policy makers, regulators, investors and keys stakeholders, all of whom addressed some of the issues affecting Africa’s education prospects.

Among the issues discussed were how Africa is faring when it comes to providing young people with the necessary quality education and skills that will expand their capacity, thinking, and expertise, enabling them to become more meaningful contributors towards the continent’s development.

Access to education

Dr Reaan Immelman, General Manager of Education and Skills at Absa, says the debate comes at a time when there is a continued focus on access to education – especially at tertiary level.

“Education is also a key pillar of our National Development Plan, which envisages that by 2030 – South Africans will have universal early childhood education. It also envisages quality school education across all levels, with globally competitive literacy and numeracy standards, as well as further and higher education and training that allows people to fulfil their potential.”

“This expanding higher-education sector should boost incomes and productivity, and shift South Africa towards a knowledge-based economy,” adds Immelman. There is also a target for a wider system of innovation that links universities, science councils and independent research and development institutions with priority areas of the economy, he says.

There is little doubt among economists, social scientists, politicians and business, that the key to stimulating economic growth and prosperity for all in Africa depends, in large measure, on our ability to pull together to ensure all Africans receive good quality education – from pre-primary through to tertiary. Importantly, the education offered needs to be far better aligned with the skills business desperately needs to fuel economies.

South Africa is not alone in making education a priority as part of economic growth: The African Union’s vision 2063 desires a “prosperous Africa, based on inclusive growth and sustainable development”.

Critical role

Immelman notes business has a very critical role to play, in collaboration with government, by helping improve knowledge and skills of workers by contributing to technical and vocational education and training. This will help boost local economies and build an appropriately skilled workforce.

“The Oliver & Adelaide Tambo Foundation debates, such as this one at the University of Free State, are not only relevant, but are also important in highlighting these issues and seeking sustainable solutions,” adds Immelman. As a bank , we have reaffirmed our commitment to economic and socio-economic growth on the continent through our Shared Growth strategy, pledging R210 million in 2017 through the Barclays Africa Group’s 2017 CEO Scholarship Fund. This will result in 3 000 university students across our ten African markets receiving a scholarship for the current academic year.”

Adelaide & Oliver Tambo Foundation CEO, Linda Vilakazi, says: “As part of commemorating the legacy of Oliver and Adelaide Tambo, and the immense contribution they made to the advancement of our society, we are delighted to deliver these debates.

“The idea is to generate critical conversations on some of the most important issues and challenges facing our country. This is in keeping with our beliefs that we must tackle our challenges head-on, and overcome them so that they do not keep us from achieving our potential.”

Barclays Africa Group Limited (BAGL) and China Development Bank (CDB) have signed a memorandum of understanding (MoU) aimed at strengthening cooperation and exploring opportunities to fund development projects in Africa.

Given CDB’s focus on infrastructure finance for roads, railways and dams, Barclays Africa will leverage the MoU to unlock opportunities in order to strengthen its contribution towards Africa’s economic growth and development. Barclays Africa will also extract synergies from the CDB’s focus on inclusive finance to provide capital to SME’s and low income communities.

In addition, Barclays Africa and CDB will explore reciprocal training and development opportunities for their respective investment teams. In this regard, Barclays Africa has already hosted more than 30 employees from the CDB.

“This MoU represents a long-term commitment by senior leadership at Barclays Africa to strengthen our relationship with the world’s largest development finance institution, which has assets of over US$2-trillion. This partnership will unlock opportunities that are aligned to our Shared Growth approach and could facilitate positive socio-economic impact,” says Barclays Africa’s Corporate and Investment Banking (CIB) Co-Chief Executive, Temi Ofong.

Barclays Africa has a history of more than 100 years in Africa, with deep local and regional expertise. As one of the leading Pan-African banks on the continent, Barclays Africa’s in-depth understanding of local markets and sectors, coupled with a strong branch, ATM and customer networks, is well positioned to provide a unique value proposition to local, regional and global clients.

“Strengthening these kinds of relationships will help our Group identify opportunities aligned to our Shared Growth commitment to leave our communities better than we found them. As a Pan-African bank, Shared Growth gives our business an exciting opportunity to make a difference in our communities and to be part of shaping the collective futures of this great continent,” says Ofong.

The CDB was established in 1994 as a policy bank but now operates as a Development Finance Institution (DFI) for the Chinese Government. By 2017, CDB supported more than 500 projects in 43 African countries valued at USD 50-billion.

In 2016, China Africa trade flow reached US$150-billion, making China, Africa’s largest trade partner for seven consecutive years.

Bank increases higher education support and reaches more institutions

Absa Bank is proud to announce an almost three-fold increase in the Barclays Africa Group’s 2017 CEO Scholarship Fund to R210m. This will result in 3 000 university students across its ten African markets receiving a scholarship for the current academic year. In 2016 the Fund disbursed R80m in scholarships to 2 000 students in universities across South Africa.

The 2017 allocation is in partnership with 21 universities in SA and several others in 9 markets in the rest of the continent.

The CEO Scholarship Fund forms part of the Education and Skills Development pillar of Barclays Africa’s Shared Growth strategy through which it has undertaken to invest R1.4bn in education and skills training between 2016 and 2018. Education and Skills Development, Enterprise Development and Financial Inclusion are the three pillars of Shared Growth, which aims to create shared value for communities and stakeholders.

Barclays Africa Group Chief Executive, Maria Ramos, said “University education unlocks opportunities that can change the lives of young people and the future of our continent. This is an expression of our Shared Growth commitment to help realize Africa’s potential and contribute to long term economic growth. This investment has been made possible by the hard work and dedication of colleagues in our business and I am proud of their commitment to making a visible difference in the lives of thousands of young Africans.”

Psycho-social support

Using a combination of academic performance and financial need, universities identify qualifying students and disburse the funds after consultation with Absa. Many of the qualifying students either have very limited financial resources or fall within the “missing middle” category of students whose parents or guardians can only afford to pay a portion of the required university fees. Successful applicants will also benefit from the leadership and psycho-social support offered by the programme.

In response to the contribution from Absa, Prof Irene Moutlana of the Vaal University of Technology said the university’s allocation will be used to assist needy and deserving students who are studying diplomas and Bachelor’s degrees in Science and Engineering and Technology, adding that “this Scholarship will indeed make an invaluable contribution to the Academic image of the University.”

Professor Anesh Maniraj Singh, Executive Director of the University of KwaZulu-Natal Foundation, said “On behalf of the Vice Chancellor, the Chair of Council and the students of UKZN, I hereby wish to express our heartfelt gratitude to ABSA for this extremely kind and generous donation. The current recipients have been really excited with their funding as I am sure will the next group of students.”

2 250 scholarships will be allocated to South African students, while 750 will go to students in the Barclays Africa operating regions outside of SA. 500 of the local scholarships will be granted to Absa staff member dependents.

Ready to work

The Barclays Africa operations outside of South Africa will begin rolling out their 2017 scholarship programmes when their academic year commences in September.

The Education and Skills Development commitment from Absa also includes:

• The support of 34 TVET colleges as part of the Department of Higher Education’s “Adopt a TVET” programme;
• Strategic University support, focused on research and capacity development initiatives
• School Governing Body training in partnership with the Department of Basic Education, and
• Ready to Work – a free skills development programme to give young people range of work, money, people and entrepreneurial skills to enhance their employment and self-employment prospects.

Together with a set of retail banking products that include a competitively structured student loan scheme and a free youth banking product, the bank has a comprehensive education and youth proposition that responds to broader development needs, which include financial inclusion.

Barclays Africa CEO Maria Ramos has accepted an invitation to become a member of the prestigious Group of Thirty (G30). The G30 aims to deepen understanding of international economic and financial issues, and to explore the international repercussions of decisions taken in the public and private sectors.

Other well-known members of this group include Ben Bernanke, the Former Chairman of the Board of Governors of the US Federal Reserve System; Mark Carney, Governor of the Bank of England; Mervyn King, a Member of the House of Lords as well as a former Governor of the Bank of England; and, William C. Dudley, President, Federal Reserve Bank of New York.

The G30, founded in 1978, is a private, nonprofit, international body composed of senior participants from the private and public sectors and academia. Membership of the G30 is by invitation only.

In a statement issued this week, the G30 noted that, alongside Ms Ramos, Agustín Carstens, Governor of the Banco de México, had accepted membership.

The statement quotes Jacob A. Frenkel, Chairman of the 30 Board of Trustees, as having said: “Maria will add diversity of perspective, and a strong and influential South African voice, to our deliberations.”

“She has a breadth of private and public sector experience that will benefit our work and discussions, from her current positions as CEO of Barclays Africa, as Chair of the Banking Association of South Africa, and her prior role as Director General of South Africa’s National Treasury.”

Ms Ramos said: “It is a pleasure to join the G30, which does such key work on international economics and governance. I look forward to working together on projects of common concern and to supporting the Group’s mission.”

Chairman of the G30, Tharman Shanmugaratnam, noted: “Agustín and Maria are outstanding leaders. They each bring a wealth of understanding of the financial and economic challenges of the times, which the G30 seeks to address through our deliberations and ongoing work program of studies.”

Shanmugaratnam continued: “The work of the G30 in international financial and economic thought leadership relies on its dynamic, engaged membership, drawn from across the globe and across public and private sectors. I very much look forward to Agustín and Maria’s contributions in the years ahead.”

Performance highlights:

(A normalised view is presented to take into account the effect of the separation from PLC)

• Headline earnings increased by 7% to R7.8 billion
• Credit impairments declined 27% from a high base in the first half of 2016
• Revenue decreased 1% to R36 billion
• Effective cost-containment helped achieve cost-to-income ratio of 55.6%
• Return on equity rose to 16.8% from 16.1%
• Balance sheet at R1.1 trillion, with strong capital adequacy and liquidity reserve positions

Barclays Africa Group Limited (“Barclays Africa”), one of the largest financial service providers in Africa with operations in 12 countries, today reported a solid financial performance for the first half of the year, demonstrating continued resilience in a deteriorating economic environment in South Africa, its largest market.

The announcement marked the first time that the company reported results following Barclays PLC’s sell-down of its majority stake in the African business in a share sale that saw exceptionally strong interest for the stock.

“We are presenting a set of results that demonstrate the real value of the 2013 acquisition of the Barclays businesses in Africa,” said Maria Ramos, Chief Executive, Barclays Africa Group Limited. “Both geographically, as well as by customer segment, they are proving their worth in yielding a strong performance for the first half, even as our biggest market, South Africa, has suffered the impact of an economic downturn.”

Summary of results

Barclays Africa Group’s normalised headline earnings increased 7% to R7.8 billion, driven by strong earnings growth in the Rest of Africa, and positive earnings growth in South Africa, featuring strong growth in corporate banking. Impairments declined by 27% from a high base in the first half of 2016, contributing to the improvement in earnings.

Group revenue declined 1% to R36 billion, given a deteriorating economic environment in South Africa, which in turn caused pre-provision profit to decline 6%. The cost-to-income ratio increased to 55.6% despite a focus on cost containment and inflationary cost growth. The return on equity remained attractive and improved to 16.8% from 16.1%.

The group continues to have a sound financial position with balance sheet assets of R1.1 trillion and strong capital adequacy and liquidity reserve positions.

Successful separation from Barclays PLC will be an overarching priority for Barclays Africa over the next three years.

For the remainder of the year, Barclays Africa will place priority focus on its retail and business bank performance in South Africa and on driving opportunities in its businesses outside of South Africa. WIMI will continue to focus on retention of clients and assets, optimising opportunities presented by the pickup in momentum in Retail and Banking South Africa and returning the business outside of South Africa to profitability.

Barclays Africa is also continuing its significant investment in technology to build a more efficient and lower-cost franchise.

“Our results today are testament to the resilience of our business and the momentum we are creating,” Ramos said. “We expect the economic environment to remain challenging but we believe the long-term opportunities remain attractive.” South Africa is in a recession after gross domestic product shrank 0.7% on an annualised basis in the first quarter. Economic growth forecasts for the full year have once again been revised downwards.

Barclays PLC Sell-down

Following the first sale tranche of 12.2% in May 2016, the next milestone was successfully navigated with the second book-build concluded in June – the biggest ever seen in the local market at R37.7 billion. The transaction achieved accounting deconsolidation for Barclays PLC.

“It represents a huge vote of confidence from investors in the group we are creating,” said Ramos. “It has been a great success and removes any uncertainty about our future ownership.”

Looking forward, Ramos said: “This is an exciting time for us and I have said that our ambition remains the same and undiminished. We are building a pan-African financial services business with the potential to unlock the real opportunities and competitive advantages we enjoy.

For more information please contact:

Carli Cooke
Barclays Africa Group Media Relations
011 350 3625
083 652 7371
carli.cooke@absa.co.za
prmedia@absa.co.za

About Barclays Africa Group

Barclays Africa Group Limited (“Barclays Africa” or “the Group”) is listed on the Johannesburg Stock Exchange and is one of Africa’s largest financial services groups.

Barclays Africa offers personal and business banking, credit cards, corporate and investment banking, wealth and investment management and insurance.

The Group operates in 12 countries with approximately 40,000 employees, serving close to 12 million customers.

The Group registered head office is in Johannesburg, South Africa and owns majority stakes in banks in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa (Absa), Tanzania (Barclays Bank Tanzania and National Bank of Commerce), Uganda and Zambia. The Group also has representative offices in Namibia and Nigeria.

For further information about Barclays Africa, please visit www.barclaysafrica.com

We are pleased to announce that Absa Corporate and Investment Banking acting through National Bank of Commerce (“NBC”) have advised Vodacom Group on the successful TZS 476 billion ($213 million) IPO of Vodacom Tanzania Public Limited Company (“Vodacom Tanzania”) on the Dar es Salaam Stock Exchange (“DSE”).

Vodacom Tanzania is the leading telecommunications provider in Tanzania, offering voice, data and mobile money services to an estimated 12.4 million subscribers. On 1 July 2016, the Tanzanian parliament legislated that telecommunications licensees in the country are required to list a minimum of 25% of their shares on the DSE. Vodacom Tanzania is the first mobile network operator to list on the DSE fulfilling its license obligations.

African equity markets are at a nascent stage of development and in recent years have seen limited capital rising. Against this backdrop, the Vodacom Tanzania IPO stands out as a landmark and transformational transaction in the African capital markets, raising capital from domestic and international investors.

At USD 213 million, the Vodacom Tanzania IPO is the fourth largest in Sub-Saharan Africa, outside South Africa, since 2008 and stands out for a number of reasons:

• The IPO size was nearly four times larger than any previous IPOs done on the DSE and approximately equal to the sum of IPOs combined in the previous 10 years.
• A landmark transaction on the DSE, raising the market capitalization of the exchange by c.10%
• In excess of 40,000 local investors participated in the offer, many who were first time participants in the capital markets
• Raised the profile of the DSE by offering an attractive, investable company for domestic and international investors
• Vodacom Tanzania has successfully fulfilled its regulatory obligations to list
• Vodacom Tanzania was the first telecoms company to market, attracting maximum participation from a developing domestic investor base. It has set the standard for all future telecom IPOs

“This transaction is a milestone in the evolution of the Tanzanian capital markets and consistent with Absa’s vision of Shared Growth in promoting development across the continent,” says Hasnen Varawalla, Co-Head of Banking at Barclays Africa.

“The Vodacom Tanzania IPO was the first IPO of this scale in Tanzania”, says Till Streichert, Chief Financial Officer for the Vodacom Group. “Its success is testament to the nature of the partnership between Vodacom Tanzania, Vodacom Group, the Absa and Barclays team, NBC and other advisors who worked together to deliver a transaction that met domestic regulatory requirements while incorporating international best practice.”

This success was possible as a result of:

• A committed, supportive and experienced management team and shareholders that worked seamlessly with all advisors
• Extensive investor education campaign driven by management, the Tanzanian broker universe and the receiving bank, NBC
• Comprehensive roadshow across all major centers in Tanzania
• Seamless execution by NBC acting as the Receiving Bank, which put a core banking system in place, procured specialised software and dedicated a trained 282-strong IPO team to manage and execute collections for the transaction – processing over 40,000 applications with zero errors

Trading of the Vodacom Tanzania stock on the DSE commenced on 15 August 2017.

“Through our own Shared Growth vision, paired with our expertise in capital markets, we have delivered a transaction that has transformed the Tanzanian capital markets and provides a platform for similar African IPOs. We congratulate Vodacom Tanzania on its debut as a listed company and wish it well for the future”, concludes Varawalla.