28 September 2004
So much for Today, Tomorrow, Together.....
The Financial Sector Campaign Coalition (FSCC) opposes the proposed takeover of Absa by British bank Barclays and calls on the government to ensure that South Africa's major banks remain in the hands of South Africans. We oppose profits being made in South African banks and sent to shareholders overseas.
During its consolidation and re-branding exercise a few years ago, Absa spent millions creating an image that it was the bank for the new South Africa. It was keen to shed its image as the banker to the apartheid regime and to recast itself as the big bank for the new South Africa, patriotic and committed to playing a key role in rebuilding our country. Now that effort seems no more than an elaborate marketing exercise, necessary so that it can be sold off to the highest bidder.
That the suitor is Britain's Barclays Bank should be cause for concern to all South Africans who believe that the role of our major financial institutions in our growth and development goals should not be subject to the whims of foreign investors.
The FSCC believes that South Africa's major financial institutions should be owned by South Africans. We are particularly concerned that the proposed deal involves buying a majority stake in Absa, the country's biggest banker to low-income earners and mortgage bondholders in SA.
We call on Absa to adhere to the transformation targets in the Financial Sector Charter and to remain actively involved in meeting targets on affordable housing, improving access to retail financial services by all South Africans, investing in black communities, businesses and agriculture.
The proposed foreign buyout underscores the need for Community Reinvestment legislation to ensure that all banks operating in South Africa reinvest in the communities from which they derive business.
Barclays has presumably built its business case in part on Absa's high bank charges which were among those criticised as being the highest in the world in the recent study commissioned by the National Treasury and the Reserve Bank. We will continue to engage with Absa and other banks to ensure that bank charges are reduced significantly across the board.
We expect Absa to remain fully committed to transformation initiatives and to make sure commitments to providing transactional, savings and credit access to the workers and the poor are honoured and implemented.
CONTACT
Collette Caine
Campaign Coordinator: Financial Sector Campaign Coalition
Tel - 082 927 1063
Email - ccaine@telkomsa.net & fscc@telkomsa.net