Tag: bank

Bill to nationalise Reserve Bank re-introduced

Source: Eyewitness News

The reintroduction of the bill comes at an awkward time for President Cyril Ramaphosa, who is on an investment drive to boost an ailing economy.

An opposition politician’s bill to nationalise the South African central bank that spooked investors when first unveiled a year ago has been revived and referred back to lawmakers, parliamentary papers showed on Tuesday.

The reintroduction of the bill comes at an awkward time for President Cyril Ramaphosa, who is on an investment drive to boost an ailing economy. He has to juggle his pro-business approach with left-leaning elements of the ruling African National Congress (ANC) that want to legislate for land expropriation without compensation, among other policies.

Introduced by leftist politician, Julius Malema, in August last year, the bill lapsed when a new Parliament was elected in May. Malema’s Economic Freedom Fighters (EFF) were one big winner, gaining 19 new seats.

When initially introduced, the South African Reserve Bank Amendment Bill put pressure on the ANC to go through with a plan it shelved in 2018 and rattled markets wary of threats to the central bank’s independence.

The ANC has said any plans to nationalise the bank will be done responsibly and not affect the institution’s mandate or independence. Reserve Bank governor Lesetja Kganyago has previously warned that the ownership debate was increasing investor uncertainty and pushing up the risk premium attached to the country’s debt.

Unlike most central banks in the world, the South African Reserve Bank (SARB) is privately owned. The ANC resolved at a party conference in December 2017 to move it into full state ownership.

Malema’s private members bill will be referred to the Standing Committee on Finance for further deliberations and public input before the lower house of parliament votes on it. If passed, it would normally then go to parliament’s upper house for approval before Ramaphosa signs it into law.

Malema, however, believes it is not necessary to refer the bill to the upper house, which could hasten its passing.

Banks set to go on strike

All of the major banks across South Africa will partake in strike action on Friday unless a court rules in favour of stopping it.

If The South African Society of Bank Officials (Sasbo) succeeds on Wednesday, service will be disrupted nationwide. The total shutdown may result in up to 70 000 employees downing tools.

Sasbo, which is affiliated with Cosatu, is is planning five marches throughout the country in Johannesburg, Durban, Bloemfontein, Port Elizabeth and Cape Town. They are scheduled to take place from 10:00 onwards.

The union is striking over the digitalisation of banking practices which have lead to job losses and retrenchments in the sector.

The South African outlined how each bank might be affected:

Standard Bank
Employees: 54 000
Customers: 8.12 million (as of 2018)
Response: The bank are waiting for the court’s decision before responding to planned strike action
Other information: Standard Bank are said to have slashed 1 200 jobs in the last year, following the closure of 91 branches across South Africa. The bank is facing the harshest criticisms from the union.

FNB
Employees: Around 30 000
Customers: 8.15 million (as of 2018)
Response: FNB envisage staff shortages on Friday, but the group have customers to ease the workload by registering for online banking, or downloading FNB’s official app before the end of the week
Other information: They have expressed their willingness to co-operate with Sasbo, after getting wind of the potential bank strike last Friday

ABSA
Employees: 42 000
Customers: Between 8 – 9 million. Just over five million people use it as their “main bank”
Response: ABSA has confirmed to Fin24 that they “will deploy a business continuity and contingency plan to mitigate the impact on customers and clients” – they expect a small number of workers to strike.
Other information: Around 187 ABSA branches have been cut from service over the past decade

Nedbank
Employees: 31 000
Customers: 7.85 million (as of 2018)
Response: They have revealed through a statement that some branches will have “a limited number of workers available”, and continued to say: “For optimal service delivery, clients are encouraged to make use of our ATMs and our convenient digital banking platforms to transact.”
Other information: The institution has joined Business Unity South Africa’s application to halt the bank strikes. Around 1 500 Nedbank staff are currently facing unemployment or redeployment elsewhere

Capitec
Employees: 12 000 – 13 000
Customers: 10.2 million (as of 2018)
Response: A representative told Business Tech: “Over the past year, our staff complement has grown by over 200 people. We also plan to open a further 17 branches in the next six months.”
Other information: Don’t expect too much disruption at Capitec. Their ship remains steady on the bank strike issue

Cash machines, inter-personal bank services and a host of branches are expected to be impacted across the country.

In order to prepare for Friday, consumers should:

  • Withdraw money in advance and make sure you have enough to last a few days
  • Any tax-related payments to SARS should be made before the close of business on Wednesday
  • Register for your bank’s online banking or download their bank app. 

Lender to poorest of the poor has no bad debt

SEF (Small Enterprise Foundation) is a South African lender most people have never heard of – yet it has no bad debt.

Lending to the poorest of the poor, it has created close to 200 000 jobs.

Many major banks have tried to break into this market, with varying degrees of success – largely due to their lending models relying on collateral and proof of income, which the economically disempowered are unable to obtain.

Small Enterprise Foundation (SEF) has modelled itself on the hugely successful Grameen Bank in Bangladesh, and has managed to succeed where other banks have failed:

  • Since 1992, it has awarded R8.7-billion in loans to people who do not qualify for traditional bank loans
  • It has created 200 000 jobs
  • The percentage of its portfolio at risk is just 0.2%
  • Overall, about 3% of SA banks’ combined loan books are non-performing
  • Capitec has the highest exposure to unsecured lending, reporting a 12.2% provision for doubtful debts
  • Unsecured lending has multiplied four-fold to R200-billion since 2009
  • Unsecured lending grew 21% last year alone
  • SEF attempts to avoid bad debt by using existing, trusted clients to onboard new ones
  • People borrowing money are then allocated to a cell of five or six other borrowers, where each cell member undertakes to cover the loan repayments of the others
  • This is a form of positive peer pressure, and ensures loans are recovered

Nedbank look to retrench 1 500 employees

Source: eNCA

Nedbank Group is in talks with about 1 500 employees over potential job cuts at the South African lender’s retail and business-banking division to cope with a struggling economy and increased competition.

The company forecasts that “between 50 and 100 employees are at risk of not being placed in a role,” Johannesburg-based Nedbank said in an emailed response to questions on Friday.

“Unplaced employees will then be assisted by the bank to either secure available alternative positions within the bank, which is our first prize, or be equipped for opportunities outside the bank.”

South African lenders are battling to grow revenue faster than costs as they contend with an economy that has shrunk for three of the past five quarters.

Consumers have been battered by rampant unemployment, rising taxes, fuel prices and utility bills, pushing them to explore cheaper banking alternatives or digital services.

Companies aren’t investing amid uncertainty over electricity supply and surging government debt levels.

“Nedbank is being forced to reshape our operating models and businesses,” the company said. “In doing this, Nedbank actively makes use of natural attrition and a redeployment and reskilling pool. Non-voluntary retrenchments are always the last option.”

The company, which employs 30,577 people, has also been reducing the floor space used by its branches and increasing the use of automation to lower costs.

Nedbank expects the process to be concluded after the final meeting with the labor union Sasbo at the end of this month, it said.

FNB accidentally gives clients free money

On Tuesday it emerged that FNB accidentally gave a number of its clients free money. The extra funds ranged from a few hundred rand to over R3 000.

FNB said that this was due to an error which is being rectified. Recipients of the extra funds will be required to pay it back, as unjustifiable enrichment can be reversed, an attorney told Business Insider South Africa.

The error appears to be due to delayed debit card transactions. FNB says that they have been in contact with clients who received the extra funds.

Retrieving the additional funds will not necessarily be an easy task, as the bank may find it difficult to extract the money from clients who have already spent it.

FNB has not revealed how much extra money was accidentally given away in total, nor how many people in total received money.

Source: IOL

The introduction of MyWORLD has elevated African Bank to a digital retail bank, offering a variety of products including transactional banking, personal loans, savings and investments and insurance.

African Bank chief executive, Basani Maluleke said: “Our increased and diversified product offering, underpinned by our Omni-channel platform, will enable us to compete favourably against the established and emerging banks.”

African Bank’s research into what South Africans want from their transactional bank revealed that people would like to transact and save together with their family, friends and their community and as individuals.

MyWORLD offers people the unique ability to bank together through shared banking.

Up to five additional accounts can be opened under the main account – a total of six accounts, with no monthly account fees on any of the accounts.

“When we compare ourselves to the Solidarity Bank Charges Report methodology, MyWORLD is the cheapest transactional account in South Africa,” explains Maluleke.

When a Primary Account Holder opens a MyWORLD account, they get access to a Primary account and two types of pockets – a power pocket and a savings pocket.

A power pocket is unique in that it is the first pocket account in the industry to offer the user full transaction capability. It comes with its own account number, debit card and PIN and earns 5.5 percent interest per annum on positive balances.

“Our debit cards are personalised and embossed and are issued instantly on demand, in any African Bank branch — a first in South Africa,” said George Roussos, group executive of digital and transactional banking at African Bank.

The savings pocket allows the primary account holder to save at South Africa’s best interest rate of 6.5 percent interest per annum on any positive balance while enjoying immediate access to their funds.

A pocket user, who can be anyone that the primary account holder designates, can be added to both a savings pocket and a power pocket. User status allows the person full access to the pocket. The primary account holder can also decide who is responsible for the pay-as-you-use transaction fees on each pocket.

As an added extra, the primary account holder can add up to 10 members on any pocket. Member status allows the member to view the pocket and to deposit, but not to withdraw or transfer any funds. This functionality can be used by informal savings clubs, church groups and any collection of people wishing to save together for a shared trip or activity.

Another key differentiator is that MyWORLD operates on African Bank’s new omni-channel platform that allows accounts to be opened and managed seamlessly through all the Bank’s channels, including the website, app, cellphone, in the branches and through the contact centres.

A customer can open a MyWORLD account online or via the app without having to visit the branch and seamlessly complete the application in a branch or contact centre. The only requirement to come into branch is to generate and receive their MyWORLD debit card.

The final drawcard is value.

MyWORLD account holders only pay for what they use and a range of free transactions and low bank fees on other transactions are offered. All costs are transparently displayed.

Maluleke said: “MyWORLD provides exceptional value and convenience at the cheapest price compared to what is currently available from other South African banks. Its innovative features provide a mechanism to share banking in families, groups and in communities, which we believe will draw a very positive response from customers.”

New TymeBank signs up 50 000 users

Although the bank only soft-launched at the end of 2018, TymeBank has already signed up 50 000 customers. This is according to Business Tech, who heard from the company’s CEO, Sandile Shabalala, at the BusinessTech Digital Banking Conference on Wednesday.

Shabalala says that the new digital banking group is looking to radically change the way South Africans access banking services in the country – and has run its first full store activation in preparation for its official launch.

The bank’s soft-launch involved placing the group’s kiosks in selected areas. The bank operates on a partnership model with Pick n Pay and Boxer stores in South Africa. This provides an easy-to-access physical point of presence for customers in places they frequent.

The partnership gives the bank 750 points of presence through the retailers’ networks, and access to 10 000 cash till points. According to BusinessTech, this gives the bank access to an extensive network without having to spend a cent on building its own infrastructure

Standard Bank to retrench 526 IT workers

By Kabelo Khumalo for IOL 

South Africa’s jobs bloodbath is raging with Standard Bank today announcing that the restructuring of its IT division will see more than 500 workers sacrificed.

Standard Bank spokesperson Ross Linstrom says of the impacted permanent staff, the majority are in the executive and managerial bands.

“This process will result in 526 IT employees receiving Section 189 notices which will commence the consultative process with the employees involved”.

“This process will create over 180 new-generation IT positions within the bank. Regrettably, this will also result in the loss of a number of existing traditional IT positions,” Linstrom said.

The bank said the restructuring was instigated by “emerging technologies and increased demands from customers”.

The unrelenting jobs bloodbath seems to be gathering steam. Power Utility Eskom has already announced plans to cut its workforce, the SABC has said it would have to let go of more than 1 000 workers for it to keep afloat. Telkom’s subsidiary BCX last week also joined the bandwagon and warned that it will retrench about 700 employees.

Ironically, as part of stemming the jobs bloodbath, all stakeholders at the Jobs Summit held last month had committed themselves to concrete steps to avoid retrenchments and support struggling companies.

Discovery launches new ‘tech-led’ bank

Source: Fin24

Discovery has launched its much anticipated bank, hailed as the first in rewarding good financial behaviour.

Speaking at the launch of Discovery Bank at the firm’s headquarters in Johannesburg, CEO Adrian Gore said, “The purpose of the bank is making people healthy in a financial sense”.

“It is a tech-led bank that is aimed at incentivising behavioural change,” said Gore.

He said the bank would be mobile-led and accessed from your phone. It will also be linked to the company’s Vitality Rewards programme.

“Everything is on the face of the app, the functionality is amazing with real time EFT payment to all banks,” he said.

Gore said, however, they would not be disclosing the bank fees as yet.

He said 10% of the bank would be owned by black depositors, adding however that it was not a BEE scheme.

In terms of the interest rates structure, Gore said it would be market-related combined with the client’s vitality status.

Clients would also be able to withdraw cash at any ATM while Gore said there are plans to set up one branch inside the company’s Sandton offices.

He said the bank’s target market was “very broad” – from a high LSM to the lower level.

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