This section of our reporting suite looks at how The Standard Bank of South Africa (SBSA) is enabling the transformation of South Africa’s economy through our broad-based black economic empowerment programmes. The report is structured according to the elements of the Financial Sector Code and covers the initiatives, projects, and strategies that are in place to drive transformation.
Our transformation efforts are guided by the SBSA political economy, transformation and black economic empowerment committee (PETBEE) which is chaired by our SBSA chief executive, Lungisa Fuzile. The Standard Bank Group’s social and ethics committee has oversight of this work and monitors progress in achieving transformation targets.
Standard Bank’s purpose is ‘Africa is our home, we drive her growth.’ Driving growth means an economy in which every South African, regardless of their race or gender or the social context, can access basic necessities; and an economy in which success and prosperity are the result of hard work and talent, rather than inherited privilege or personal connections. As a corporate citizen with a social responsibility, we are committed to supporting economic growth.
Standard Bank’s BEE Scorecard 2018
|Ownership||23 + 5 bonus points||23.81|
|Skills development||20 + 3 bonus points||17.62|
|Preferential procurement||15 + 4 bonus points||18.83|
|Socioeconomic development and consumer education||5 + 3 bonus points||7.11|
|Empowerment financing and enterprise and supplier development||25 + 4 bonus points||20.88|
|Access to financial services||12||11.42|
|Total score||120 + 19 bonus points||114.55|
|Broad-based BEE status||Level 1|
|BEE procurement recognition percentage||135%|
|Black ownership percentage||22.2%|
|Black women ownership percentage||9.59%|
|51% black designated group||No|
We scored 23.81 out of 28 points against the ownership element of the revised Financial Sector Code scorecard. This is an improvement against our score of 23.78 out of 28 points in 2017.
Standard Bank’s shareholding is characterised by significant global and institutional ownership, reflecting our status as Africa’s largest financial services provider. Our shares are publicly traded on the Johannesburg Stock Exchange. Many of our shareholders are ordinary South Africans who own a stake in Standard Bank through their pension funds and unit trusts. Many of our employees are also shareholders. We allocate shares to senior employees as part of their remuneration package, helping to ensure that they have a vested interest in the long-term success of the company.
Standard Bank scored 14.88 out of 20 for this element of the Financial Code in 2018. This is an improvement against our score of 12.77 out of 20 in 2017. Our score is calculated based on the membership of the SBSA board and executive committee, including Standard Bank Group executive committee members employed in SBSA. The score also measures the representation of black people, black women and African people across occupational levels.
SBSA scored 17.62 on the skills development element of the scorecard. This is slightly lower than the score of 18.31 we achieved in 2017, primarily due to spending on the training of unemployed black people being included under CSI rather than skills development, and a delayed start to some of our learnerships.
We scored 18.83 out of 19 for preferential procurement. This is a significant improvement against our score of 17.49 out of 19 in 2017 and reflects the bank’s increased investment in procuring from black and black women-owned qualifying suppliers.
We are committed to advancing job creation and economic transformation by opening opportunities in our supply chain to black-owned suppliers and small enterprises. We have revised our preferential procurement and supplier development policy to better support transformation and inclusion within our supply chain. We work with potential and current suppliers to identify appropriate opportunities, and we provide successful candidates with business development support. We also provide suppliers who meet specific criteria with access to finance where needed.
We scored 7.11 out of 8 for the socioeconomic development and consumer education pillar. This is a significant improvement in comparison to 5.18 out of 8 points in 2017. This element measures the annual value of the bank’s qualifying socioeconomic development contributions as a percentage of net profit after tax (NPAT), together with the annual value of all qualifying consumer education contributions as a percentage of NPAT of our retail business (PBB SA). The Financial Sector Code requires us to spend 0.6% of NPAT on socioeconomic development, and 0.4% of retail (personal and business banking) NPAT on consumer education. In 2018, Standard Bank’s total spend on socioeconomic development was 0.88% of NPAT and spend on consumer education was 0.42% of retail NPAT.
Businesses, large and small, require access to finance to expand their operations and improve productivity. Accessing finance enables them to access supply chains and equipment and as well as access new markets, creating jobs but also boosting profitability. We scored 20.88 out of 25 for the empowerment financing and enterprise development element. This is below our score of 24.51 out of 29 in 2017. New targets for empowerment financing have been agreed at the Banking Association of South Africa (BASA). The Financial Sector Transformation Council (FSTC) is expected to issue an updated guidance note that reflects these targets.
Financial inclusion is related to economic growth, efficiency, dignity and welfare. Low levels of financial inclusion undermine the integrity of the financial system and pose a risk to socioeconomic development. South Africa’s government has taken many steps to adjust the regulatory framework in a way that supports greater financial inclusion. This has included making the National Payments System accessible to a broader range of players, including nonbank payment providers. Recent proposals for regulatory reform in the insurance sector include measures that are aimed at facilitating new entrants, as well as new insurance products for lower income customers.
For more information about the ways in which Standard Bank is impacting on the economies and societies in which we operate, please visit our Report to Society website. For detailed information on our material issues, and our performance against our five value drivers, please refer to the Standard Bank Group’s Annual Integrated Report.