Stephen Seaka - ABSA Presentationcdn.entelectonline.co.za/...ABSAPresentation.pdf · Microsoft...
Transcript of Stephen Seaka - ABSA Presentationcdn.entelectonline.co.za/...ABSAPresentation.pdf · Microsoft...
IMFO ConferencePromoting effective governance in the public sector
October 2015
Barclays Experience: Stephen Seaka, Head of Public
Sector
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Agenda
1. Introduction
2. ABSA Bank Overview
3. Role of the Bank in Good Governance
4. Conclusion
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� It is a pleasure to have the opportunity to address you on behalf of Absa at this IMFO Conference, under the theme ‘Back to Basics: Walking the talk through Effective Governance
� Let me also extend special thanks to all the participants – marks 86th year on existence of IMFO
� The partnership between ABSA and IMFO is one that is deeply entrenched. Not only has ABSA been the primary banker to IMFO, ABSA shares the vision of IMFO to strengthen local government
capacity in order to delivery services to the closest layer of government to communities to operate effectively and to deliver on their mandates
� As ABSA we are aware of the challenges that face local government . With the increased level of urbanisation, the increase in general world population, the economic growth experienced in the
developing world as well as the adoption of decentralised governance systems by more and more countries around the world, the relevance of local government has never been more important.
� Local governments are faced with the challenges of providing infrastructure including roads and transport, electricity and power, water and sanitation, housing, hospitals and clinics, recreation
facilities, as well as other social and economic infrastructure, which require funding including innovative funding solutions. The demand to also deliver public goods and service to communities is also increasing
� Over the past year or so , we have embarked on a new journey that will change the way our clients view the bank , we have done extensive work to really understand our clients ecosystem and how
we as a bank can play a role as joint partners in enabling our clients to achieve their ambition in the right way.
Introduction
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Overview of the ABSA Bank and Value Add
Strong Regional
Commitment
The ‘Go-To’ banking partner across Africa
Long track record and
experience
Fully Local, Fully Global
Operating Model
Committed Product
Investment Plan
Award Winning Franchise
Why ABSA?
Key Value-Add
� Global coverage team (Coverage and Cash Management) located in London and Johannesburg for
all Africa requirements / service queries
� Facilitation of interactions with Central Banks in all our markets
� Access to leading macro-economic research / economists covering DSV presence countries
� Africa is key to Barclays global strategy
� Recent strategy announcement May 8th, 2014 confirms regional importance
� Over 150 year presence in region – first branch established in Egypt in 1864
� Important bank supporting in-country economies across region
� Globally coordinated coverage model
� Largest branch network vs. competitors
� In-depth knowledge of local regulations, legal requirements and market practice
� Connectivity channels across Internet, SWIFT and H2H platforms
� Leading innovation drive (e.g. mobile and cash-less banking)
� Streamlining documentation, billing and service infrastructure
� One of the most respected banks in Africa
� Regularly win awards recognizing devotion to customer service / product quality
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Absa Bank
R991 billion total assets, A-/Baa1 credit rating
Credit Ratings: Strong Financial Position
� Barclays currently hold 62.3% interest in the Absa Group
� Absa employs approximately 31,191 people, manning 789 branches to serve 9.2 million customers
� Absa Group enjoys a capital reserve in South Africa with a total ratio of 14.4%
� Absa is the highest rated South African Bank with a AAA.zafnational scale rating
Barclays Bank PLC
Agency Long-Term Short-Term
Moody’s A2 P-1
Standard & Poor’s A- A-2
Fitch A F1
BEE Status Capitalisation ratio Market Capitalistion
Level 3 14.4% 154 million
nr = not rated, GSR = Global Scale Rating, NSR = National Scale Rating Absa Bank Limited (“ABL”) rated by Fitch Ratings (“Fitch”) and Moody’s Investors Service; and Barclays
Africa Group Limited (“BAGL”) rated by Fitch only. Under Fitch, the credit ratings disclosed above are the same for both ABL and BAGL and therefore no separate disclosures have been made
Absa Bank Ltd
Agency Long-Term Short-Term
Fitch AAA(zaf) / Sta F1+(zaf)
Moody’s A1.za P-1.za
Standard & Poor’s Nr Nr
Barclays Bank PLC
£1.6 trillion total assets, A credit rating� Founded in 1690 and headquartered in London, Barclays bank
PLC is a major global financial services provider
� Operating in more than 50 countries and employing
approximately 132300 people, Barclays serves 48 million clients
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Public Sector Landscape
National Government
Provincial Government
Local Government Education
OrganisedGroup
National Departments
Provincial Departments
Metropolitan Municipalities
Higher Education Universities
Unions
Schedule 2Major SOE’e
Provincial Public Entities Schedule 3C
District Municipalities
FET Colleges Churches
National Public Entities Schedule 3A
Provincial Business Enterprises
Schedule 3D
Local Municipalities
SETA’s
National Business Enterprises
Schedule 3BMunicipal Entities Schools
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ABSA: Local Government Geographical Footprint
LimpopoLimpopo
ABSA 12Municipalities: 30ABSA 12Municipalities: 30
Free StateFree StateABSA 18Municipalities: 24ABSA 18Municipalities: 24
MpumalangaMpumalangaABSA 7Municipalities: 21ABSA 7Municipalities: 21
KwaZulu-NatalKwaZulu-NatalABSA 20Municipalities: 61ABSA 20Municipalities: 61
Eastern CapeEastern Cape
ABSA 11Municipalities: 45ABSA 11Municipalities: 45
GautengGauteng
ABSA 8Municipalities: 12ABSA 8Municipalities: 12
North WestNorth WestABSA 14Municipalities: 23ABSA 14Municipalities: 23
Northern CapeNorthern CapeABSA 13Municipalities: 32ABSA 13Municipalities: 32
Western CapeWestern Cape
ABSA 19Municipalities: 30ABSA 19Municipalities: 30
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ABSA: Local Government Portfolio
5
12
14
48
23
22
3
7
13
62
47
22
Metros (A)
Secondary Cities (B1)
Large Town (B2)
Small Towns (B3)
Rural (B4)
Districts (C)
ABSABanked
Not ABSABanked
� ABSA, a market leader in the municipal transactional banking space banking 122 of the 278 municipalities (with market share of 44%)
� The ABSA portfolio: ABSA banks 59% (16 of the 27) of the top tier municipalities (metros and secondary cities)
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Good Governance
Board of Directors
Management Board Supervisory Board
Control Body
Administrative Body
Control Committee
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Importance of Governance
� ABSA as a bank strictly regulated
� Regulated to mitigate risk of failure of bank and systemic risk to financial system
� Regulated by: SARB, Johannesburg Securities Exchange, National Treasury, Companies Act., National
Credit Act, Code of Banking Practice
� Governance structures:
– Board
� Independent non-executive chairperson
� Executive directors and independent directors
– Board Committees
� Audit, Risk, Remuneration
� Depth of management experience at the senior
administrative level
– SARB approves appointment of CEO and CFO
� Promotion of sound business practices
� Quality of internal controls
� Responsible lending practices
– Target lending criteria for local government
� Local Government regulated
� Regulated to enable governance, financial accountability
� Regulated by: MFMA, Municipal Systems Act, Municipal
Structures Act, National Treasury regulations
� Governance structures:
– Council
– Mayoral Committee
– Municipal Public Accounts Committee
– Audit & Performance Committee
– Oversight Committees
� Depth of management experience at the senior
administrative level
– Accounting Officer (City Manager and CFO)
� Promotion of good governance practices
� Quality of internal controls
� Accountability to stakeholders
ABSA Regulation Local Government Regulation
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Service delivery
Credit risk assessment
Ability to borrow
Revenue collection
Depth of management experience at the senior administrative level
Quality of internal controls and financial planning
Financial planning and treasury management
Revenue collection
Implementation of programmes and projects
Audit outcome
Importance of Governance in Local Government
Good Governance impacts on Factors impacting service delivery of municipality
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Key Initiatives
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Package
innovative
Infrastructure
funding models that could enable the Municipalities
to implement
Infrastructure capital
programme
Partner with development
banks to
look at possible
Strategic debt financing models
and mechanisms
Financial Mentoring
TrainingProvide training
workshops for senior and
executive municipal staff,
to equip them with more financial knowledge
Advisory Services Advisory services
on green initiatives based
on our global footprint e.g.
Green home loan/ Bond benefit - Provide home
loans/bond for green
houses, energy efficient
solutions
Citizenship and SMMESupport
Enterprise development
services to the SMME and
Ready to work –Citizenship
Thought Leadership
and Strategic Partnership
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Conclusion
Absa as part of Barclays Group a local, regional and global
entity, ABSA remains committed to partner on practical initiatives to strengthen
financial capacity within the sector and ensure that local governments have the
tools to respond more effectively to the development needs of their
communities
As ABSA citizenship is at the center of everything we do, as such
we have worked with local authorities a number of initiatives including youth entrepreneurship facilitating access to finance and non-financial support
We believe that when ambitions change lives, we all prosper
We have strong local government capabilities as
evidenced by our strong presence in local government
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Conclusion
Aligning our solutions through effective strategic partnership
and thought leadership