Banker S.A. Edition 5

Edition 52013

Magazine of The Banking Association South Africa

SA

BA

NK

ER

SA

E

DIT

ION

5 P

ICA

SS

O H

EA

DLIN

E

BUSINESS AND GOVERNMENTLIVING WITH DEMOCRACY

DR BLADE NZIMANDE ON BANKSETA

Edition 52013

Magazine of The Banking Association South Africa

SA

BUSINESS AND GOVERNMENTLIVING WITH DEMOCRACY

DR BLADE NZIMANDE ON BANKSETA

‘Can we be a winning

nation?’

Pravin Gordhan

The BRICS bank Who will set the agenda?

Deloitte 2013 Banking Industry OutlookCustomer story: home loan denied

Where unique people create inspired results.

Visit us at http://www.deloitte.com/view/en_ZA/za/industries/� nancialservices/index.htm

Follow @DeloitteSA

Follow Deloitte South Africa

At Deloitte South Africa, there are

more than 3 500 unique and

dedicated problem solvers with

sharp minds and radical thinking

working to provide business solutions to

clients in South Africa, Africa and

globally. With over 4 600 degrees and

diplomas, the team of engineers,

lawyers, gadget lovers,

musicians, chartered accountants, athletes,

bloggers, tweeters, teachers, world travellers,

trendspotters, bikers, hikers, and strategists,

are using their breadth of

skills, global insights

and deep experience to

deliver inspired results.©hillibush9144deloitte

Where unique people create inspired results.

Visit us at http://www.deloitte.com/view/en_ZA/za/industries/� nancialservices/index.htm

Follow @DeloitteSA

Follow Deloitte South Africa

At Deloitte South Africa, there are

more than 3 500 unique and

dedicated problem solvers with

sharp minds and radical thinking

working to provide business solutions to

clients in South Africa, Africa and

globally. With over 4 600 degrees and

diplomas, the team of engineers,

lawyers, gadget lovers,

musicians, chartered accountants, athletes,

bloggers, tweeters, teachers, world travellers,

trendspotters, bikers, hikers, and strategists,

are using their breadth of

skills, global insights

and deep experience to

deliver inspired results.©hillibush9144deloitte

www.performancesolutions.co.za • (+27) 011 789 1957

LEARNING SOLUTIONS FOR PROFESSIONAL PERFORMANCE IMPACT

Are your sales staff politely processing account closure requests in accordance with procedure?

When the world of banking was flat, procedure reigned supreme. Those who could fulfil orders efficiently and transact quickly were deemed highly employable. However, as the world of banking achieves a new perspective, shaped by consumers, technology and economic changes, a new understanding of the ‘round’ world of banking

requires new tools to navigate uncharted territory.

Cornerstone Performance Solutions provides learners with the tools required to operate effectively within the banking industry. Courteous efficiency is no longer sufficient when it results in reduced value-

but combine it with contextual insight, innovative solutions and adaptability, and you not only produce increased customer value, but up-selling, cross-selling, customer retention and organisational impact.

Courteously losing business?

CONTENTS

3Edition 5 BANKER SA

07 MD’s Message Banking Association South Africa MD Cas Coovadia on the implementation of the National Development Plan

08 Profile ‘Can we be a winning nation?’ Pravin Gordhan and his plan for 2013

14 Summit The BRICS bank – do we need

another development bank? BRICS member countries are pushing ahead for

the establishment of their own development bank

20 Current Affairs Business and government Too many pointing fingers, writes Prof Steve Friedman

26 Customer Story Application declined Why are unsecured loans easier to get than

home loans?

31 Banking IT Retail banking IT spend rockets Focusing – and spending – on customer

satisfaction and revenue growth

32 Legal Viewpoint Project bonds: the future infrastructure finance in South Africa? The time is ripe for the injection of fresh life into South African infrastructure investment

35 Training Transformation has training at its core Dr Blade Nzimande on BANKSETA’s responsibilities

38 Industry Survey The Deloitte 2013 Banking

Industry Outlook Financial services has become

a technology business

35 32


Copyright: Picasso Headline and The Banking Association South Africa. No portion of this magazine may be reproduced in any form without written consent of the publishers. The publishers are not responsible for unsolicited

material. SA Banker is published quarterly by Picasso Headline Reg: 59/01754/07. The opinions expressed are not necessarily those of Picasso Headline. All advertisements/advertorials and promotions have been paid for

and therefore do not carry any endorsement by the publishers.

Publishers: Picasso Headline (Pty) Ltd 105–107 Hatfield Street, Gardens,

Cape Town 8001, South AfricaTel: +27 21 469 2400 Fax: +27 21 462 1124

Head of Editorial and Production Alexis Knipe [email protected]

Editor Charles Boffard [email protected]

Banking Association Editorial Board Lawrence Khoza Luyanda Tetyana Ndivhuho Mafela Thenji Nhlapo

Contributors Charles Boffard Prof Steve Fredman Sure Kamhunga Phakamisa Ndzamela

Copy Editor Fikiswa Majikela Production Coordinator Shamiela Brenner

Content Coordinator Michele Jarman [email protected]

Head of Design Studio Rashied Rahbeeni Designers Dalicia du Plessis Mfundo Ndzo

Business Manager Robin Carpenter-Frank [email protected] Special Projects John Dos Santos [email protected] Project Manager André Potgieter [email protected]

Sales Consultants Andrew Green Basil Jones Financial Accountant Lodewyk van der Walt

SUBSCRIPTIONS AND DISTRIBUTIONShihaam Adams

E-mail: [email protected]: 021 469 2400

ADVERTISING: ANDRE POTGIETERE-mail: [email protected] Tel: 021 469 2498

Senior General Manager: Newspapers and MagazinesMike Tissong

Associate PublisherJocelyne Bayer

43 Banking Association Member Introducing Bank of China, Johannesburg Repositioning itself to remain relevant in the ever-

changing financial services market

45 Banking Association Member Introducing Finbond Mutual Bank Focused on investment and savings and

micro-credit products

47 Business Life Technology BlackBerry’s new hope, the iPad Mini,

HTC One and a Sony Vaio

48 Banking News: South Africa What – and who – is making news in South

African banking?

51 Banking News: International Britain’s “electrified fence” and Kenya’s mobile money

55 Lifestyle Meet the Bankers Dr Mathai Vaidyan of the State Bank of

India, Johannesburg

56 Product News New products for the business of finance – and for financial people

51

WE DON’T EMPLOY STAFF.WE EMPLOY HEROES.

These are some of our heroes. Every one of them plays an integral role in ensuring that payment transaction deadlines are met and high-service levels are maintained. From Michelle, who manages our client service desk, to Terence, who keeps our operations centre running, and IT staff like Tilman, Mervin, Ernst, Dina, Mary-Annand Lebo, who are always on standby; ready to respond to client and industry needs 24/7, 365.

Every member of staff is focused on meeting the needs of all our stakeholders, highlighting our commitment to our role in maintaining the safety and security ofthe National Payment System.

To fi nd out more about our behind the scenes work as South Africa’s trusted payments transaction partner, visit www.bankservafrica.com or call 0861 111 354

IREL

AN

D/D

AVEN

PO

RT

719

04

Trusted for simplicity for 40 years.

71904 Mag 275x210.indd 1 15/03/2013 10:22

MD’S MESSAGE


Moving towards the implementation of the National Development Plan

The Banking Association South Africa, at its last Board meeting in November 2012, agreed the industry would concentrate its e�orts this year in promoting the National Development Plan (NDP). is decision was in line with a broader business view that the

NDP is the one plan that has a broad base of support, and is the most pragmatic and realisable vision for South Africa. e African National Congress (ANC), at its Mangaung congress, also adopted the NDP as the central instrument against whi� all policy will be measured and that will guide government in ful�lling its governance responsibilities.

e NDP is the product of broad consultation, consideration and analyses of the critical issues we need to address as a country, if we are to ful�l the tremendous potential we have and make real the democracy we a�ieved in 2004. e NDP o�ers exciting thinking on, inter alia, the following:• A capable state• Infrastructure development• Governance• Human se�lements, including appropriate spatial planning• Education• Building trust• Economic growth and development• Health

e NDP stresses the importance of a state that has the capacity and commitment to deliver services e�ciently and care for those who are indigent. e plan �arts a role for the state that is facilitative of private sector growth, but intervenes where markets do not work. e NDP is very clear that the state, and other sectors of civil society, needs to be ruthless in �ghting corruption.

e plan also stresses the critical need for collaboration between all sectors of society and government to a�ieve the outcomes we need to improve the living conditions of all our people and address the growing income gap between a minority and the vast majority.

e theoretical adoption of the NDP by a broad spectrum of society and government must translate into real delivery, su� that the NDP moves from being a vision to a living strategy for delivery. Government must ensure the Minister of Planning has the necessary capacity and resources to drive the NDP through all facets of government. e President must be emphatic that the Minister of Planning will �ampion the NDP and will receive the collaboration

of all ministries. Business must now take the initiative in identifying implementable projects cited in the NDP, collaborate on what role business can play in implementing the projects and approa�ing government to discuss its role. All critical stakeholders will have to make sacri�ces and compromises in the national interest. However, su� compromises must not result in poor quality, non-delivery or a fracturing in the pact we need to build.

We must also be cognisant of the �allenging economic times within whi� we need to implement projects cited on the NDP. e budget de�cit for year-end 2013 will be 4,3% of gross domestic product (GDP). We will need to allocate funds to the many social programmes government has instituted. We will need to ensure appropriate allocation of resources, and particularly the e�cient use of resources. is entails e�ciency in state departments and institutions and a zero-tolerance approa� to corruption. e private sector has a critical role to play in assisting in ensuring sound government capacity, although government must satisfy the private sector that it will do the basics to receive capacity in a sustainable way.

Our country is, I believe, at a T-junction. We can �oose to work together to make the vision in the NDP concrete, or we can �oose to destroy all the potential we have and to some extent a�ieved, but still have a great deal to do!

Cas CoovadiaManaging Director, �e Banking Association South Africa

Can we be a winning nation? Do we need the BRICS Bank? How can banks reduce the proportion of unsecured loans?

If you have an opinion concerning a Banker SA article, e-mail us at [email protected].

8 BANKER SA Edition 5

PROFILE

�e pro-business tone of the budget will be welcomed by banks and by all South African businesses.


According to Gordhan, South Africa’s gross domestic product (GDP) growth this year is expected to be 2.7% compared to the 3% the National Treasury estimated in October (2012), rising to 3.8% in 2015 against earlier predictions of a 4.1% growth.

�is compares with GDP growth rates of over 6% to 10% in some countries in sub-Saharan Africa, even though the growth is o� a lower base than that of South Africa, the region’s largest economy by output.

On the other hand, the Minister had to send the right message to investors and rating agencies who are still concerned about the downside risks to the economy as a result of labour unrest, the �scal de�cit and tepid economic growth.

Gordhan did not disappoint, neither did the budget shoot the lights out of the sky, even though the most noticeable relief was his decision not to increase personal income tax.

In the end, economists, bankers and opposition parliamentarians appeared impressed that Gordhan had managed to produce a balanced budget that could lay the foundation for sustained economic growth.

Dr Azar Jammine, Director and Chief Economist at Econometrix, a resear� and analysis organisation states: ‘It is a well-known cli�é to suggest that (Gordhan) had very li�le room to manoeuvre in

‘Can we be a winning nation?’Finance Minister Pravin Gordhan crafted the 2013/14 �scal budget against the backdrop of a tough macro-economic environment, spiralling unemployment and a worrying budget de�cit.

drawing up the budget. Economic growth over the past year as well as prospects for the coming year have turned out to be weaker than budgeted for a year ago.’

Banker Sim Tshabalala, who is Joint Group CEO of the Standard Bank Group describes the budget as pro-business, singling out the ra� of tax incentives that he says will encourage more cross-border investments by companies, including banks.

South Africa’s big four banks are among the most aggressive in pursuing organic and acquisitive growth in sub-Saharan Africa, where Standard [Bank] is the largest by assets and income. Retailers and miners are also jo¤eying for market share in growth markets in east and west Africa.

‘We think the pro-business tone of the budget will be welcomed by banks and by all South African businesses,’ says Tshabalala. ‘To quote Minister Gordhan, “Growing the economy means expanding business activity.” However, as the Minister also says, this means that the private sector has serious responsibilities to improve our competitiveness and to expand trade, investment and job creation. South Africa’s banks will continue to work hard to embody and support South African competitiveness,’ says Tshabalala.

Analysts, however, warn it will not be easy, given the expected drop in revenue collection, low economic output and the impact of the tepid global output on South African economy.

“As the voice of the banking industry, The Banking Association South Africa continues to build a better future through competitive, economically responsible

and innovative banking while contributing to the socio-economic growth and development of our country through the delivery of financial services.”

‘We heed the call to put South Africa first - through

one giant leap.

Every South African has a patriotic duty to build and promote our country.

The Banking Association South AfricaResponsive. Progressive. Accessible. Better Future

11

PROFILE

Edition 5 BANKER SA

�e overriding theme, however, was that Gordhan is aware of the need to create jobs as evidenced by endorsement of the National Development Plan (NDP), whi� the Minister says is key to economic growth.

‘Of greater importance – from a ratings perspective – is going to be the extent to whi� the tenets of the NDP show signs of increased implementation in the year ahead,’ says Dr Jammine.

In tandem with the NDP, the Minister announced the start of the long-awaited infrastructure spend project of more than R820 billion planned by both the government and state-owned enterprises. �is programme, whi� has been stalled since the end of the last multi-billion rand infrastructure projects for the 2010 World Soccer Cup, will not only boost activity in the key construction and building sector, but create thousands of permanent and temporary jobs.

Edward Kieswe�er, Group Chief Executive of Alexander Forbes Ltd, is enthralled particularly with the announcement of the infrastructure spend projects. ‘�e government’s commitment

to the infrastructure development is both necessary and admirable, but unless we have a step �ange in our capacity to deliver, this programme remains ambitious,’ says Kieswse�er.

�e private sector has also responded to calls by the government for a joint e�ort to ta�le unemployment and poverty. In the spee�, Gordhan announced pledges by companies in sectors su� as telecommunications, retail and mining, to embark on billion-rand projects worth over R70 billion whi� are estimated to create thousands of jobs.

Gordhan says these projects follow discussions held between the government and business leaders on how to ki�-start growth and showed ‘growing con�dence in the business outlook despite di�cult conditions’.

Kieswe�er says a private sector partnership with government is a critical success factor, now more than ever.

Speci�c to the �nancial sector, Gordhan did not spell out additional measures – as had been expected by some bankers –

Projects follow discussions held between the government and business leaders on how to ki�-start growth and showed growing con�dence in the business outlook despite di�cult conditions.


PROFILE

of how government will implement the so-called twin-peaks regulatory policy framework. �e framework, �rst announced more than a year ago, is aimed at separating the prudential regulatory functions of the Reserve Bank from market conduct responsibilities whi� will be assigned to a more strengthened Financial Services Board (FSB).

However, the Minister proposed a ra of measures aimed at encouraging savings and strengthening the retirement sector. Among these were proposals to introduce tax-preferred savings and investment accounts in 2015, and to ensure retirement funds identify appropriate preservation funds for exiting members who will be encouraged to preserve when �anging jobs.

‘Retirement funds will be required to guide their members through the process of converting savings into a regular income

a er retirement, and to �oose or establish default annuity products that meet appropriate principles and standards,’ says Gordhan. ‘More competition will be promoted by allowing providers other than life o�ces to sell living annuities,’ he adds.

�e Minister says government is also looking at ways of how to encourage all employers to provide appropriate retirement me�anisms for their employees as part of the broader social security reforms.

Tshabalala says the announcement that tax-preferred savings and investment accounts will be introduced in 2015 is pleasing for two reasons. Firstly, he says, the economy as a whole will bene�t from the higher rate of savings that is likely to induce. Secondly, banks are likely to �nd it somewhat easier to address the stable liquidity �allenge created by Basel III.

More competition will be promoted by allowing providers other than life o�ces to sell living annuities.


Tshabalala is also happy with the proposed reforms of retirement funds, so does airman of Alexander Forbes, Sello Moloko.

‘At current levels, too many South Africans will retire poor. �is further exacerbates an already low national savings culture and an ever-increasing burden on the State to provide necessary, but costly social grants,’ says Moloko. ‘�is is an issue that calls for government, the retirement bene�ts industry and other key stakeholders, su as employers and trade unions, to put our heads together to suggest and implement sustainable and all-encompassing retirement bene�ts,’ he says.

Tshabalala says bankers are keen to engage with National Treasury to discuss how to increase mortgage lending and increase the overall lending book.

‘I think this will lead to valuable discussions about the balance of responsibility between the public and private sectors to o�er and guarantee housing �nance; and may also enable us to look (as a country) at how best we can respond to the Basel III requirements without unduly restricting long-term lending.’

Bankers say they are also keen to play their part in encouraging responsible lending and recovery of loans, whi Gordhan mentioned in the budget. Gordhan has been on a crusade that has become almost personal, to force both banks and non-�nancial credit providers to adopt more responsible lending practices and discourage over-indebted customers to borrow more.

Estimates show that of the more than 19.5-million credit active South Africans, as

many as 12-million have missed at least one debt instalment, while more than nine million have impaired credit records, meaning they have missed three or more instalments. Even more worrisome is the fact that more than 55% of credit-active people spend more than what they earn.

‘We fully share the Minister’s concern about personal lending and recovery practices that may have le� workers without money to live on,’ Tshabalala says. ‘As agreed between the members of �e Banking Association South Africa and the National Treasury in November 2012, we will continue to work with the Treasury and the National Credit Regulator to make sure that abusive practices are brought to an end,’ he says.

Gordhan also con�rmed plans by BRICS member countries to establish a development bank to mobilise savings to fund infrastructure projects and other projects aimed at stimulating intra-BRICS trade and investment. The Minister says BRICS countries also plan to pool their combined foreign exange reserves of $4.5-trillion to support ea other at times of balance of payments or currency crisis.

Tshabalala says that the proposed BRICS development bank could well be a useful new source of funds for infrastructure development. ‘�e creation of a BRICS foreign exange pool and a BRICS trade insurance risk pool could be valuable new sources of �nancial stability for South Africa and our BRICS partners,’ he says. By Sure Kamhunga ■

BRICS countries also plan to pool their combined foreign exange reserves of $4.5 trillion to support ea other at times of balance of payments or currency crisis.

PRAVIN GORDHAN – A QUIET CRUSADERAmiable, friendly and forthright, Pravin Gordhan (born 12 April, 1949) is the man managing the finances of Africa’s largest economy. He plays an important role as South Africa’s representative at the G20 group of countries and also provides input and influence on the Basel Committee of Banking Supervision, of which South Africa is a member.

Gordhan took over as Finance Minister from Trevor Manuel on 11 May 2009, taking charge of state finances that were in surplus, thanks to high tax revenues boosted by a commodity boom not seen in decades.

Gordhan joined the Ministry of Finance after a successful stint at the South Africa Revenue Service (SARS), where he was instrumental in ensuring that it was run with operational and management autonomy that is found in the private sector.

His ability to steer the economy through stormy water was tested when he joined the National Treasury, when South Africa was in the throes of its first recession in more than a decade as a result of the global credit crisis. Thanks to a strict regulatory regime, the government did not bail out local banks as was the case in the US and Europe.

This explains why Gordhan is critical of the wayward practices of bankers in developed economies whom he believes were partly responsible for the credit crisis and its subsequent impact on the global economy.

Gordhan, who is married with two children, is a pharmacist by training, having obtained his Bachelor of Pharmacy degree in 1973. Redressing the past social and economic imbalances in South Africa has always been a drive for him, and underlies his current crusade to force banks and non-financial credit providers to introduce more responsible lending practices. This resulted in a landmark agreement in November 2012 between the National Treasury and banks, to impose a self-regulatory mechanism to promote responsible lending. Gordhan wants to extent the agreement to non-banks, such as retail-store credit providers and micro-lenders.


SUMMIT

Encouraged by the growing shi� in the balance of economic power between developed and emerging economies, BRICS member countries are pushing ahead for the establishment of their own development bank. �is is in addition to a planned bailout fund the

bloc is considering, whi� would be supported by foreign reserves of what some estimate are up to US$4-trillion. BRICS members are Brazil, Russia, India, China and South Africa.

The BRICS bank – do we need another development bank?‘Emboldened by the growing shift in the balance of economic power between developed and emerging economies, BRICS member countries are pushing ahead for the establishment of their own development bank.


securitySecurity essential? Sentinel. The cunning of forgers should never be underestimated. Fortunately, their

misguided creativity has been more than matched by Sappi innovation.

Our Sentinel range of secure paper offers overt, covert and forensic security

features that can be used in a multitude of applications designed to thwart

the best attempts to accurately reproduce valuable items such as pass ports,

cheque papers and ballot papers. As a trusted global partner, we offer

customised secure paper solutions, whether it is for watermarks, invisible fibres

or microprinting. All our products are manufactured under strict security controls

and are CMSA certified. For further information, please contact Andries Rush

on 011 407 8433 or e-Mail [email protected].

www.sappi.com

22

08

1


SUMMIT

Details of the funding, structure and mandate of the development bank have been sket�y, although its establishment was endorsed by the leaders of the BRICS countries who at their last summit in India, Mar� 2012, mandated that a joint working group be established to study the feasibility of its establishment.

e leaders want the institution to mobilise funding for infra-structure and sustainable development projects in the BRICS countries and other emerging economies and developing coun-tries. ey also want it to play a key role in promoting in-tra-BRICS investment, economic growth and intra-BRICS trade, whi� currently exceeds US$230-billion and is projected to exceed US$500-billion by 2015.

e development bank is being seen as a direct �allenge to the perceived stranglehold of the World Bank and the International Monetary Fund over the provision of development �nance to developing and emerging economies.

But a South African-based diplomat downplays the political signi�cance of establishing the bank. ‘I see the bank as more of a realisation of the economic power within the BRICS countries and the potential of their economies to support global economic growth, particularly a�er what happened a�er the last credit crisis,’ he says. ‘However, we should not be oblivious to the political rivalry between the United States and some of the BRICS member countries like Russia and China,’ the diplomat says.

e BRICS leadership would have to de�ne the relationship be-tween the BRICS Bank, the large banking institutions, development �nance instituions and other existing institutions in su� areas as focus, model of �nancing and clients.

Analysts and bankers have mixed views about the need and role of a BRICS development bank.

First National Bank CEO Mi�ael Jordaan says a BRICS bank will send a strong signal to the rest of the world that there is co-operation between BRICS countries whi� has been mostly “theoretical” in the past.

According to Nedbank CEO Mike Brown, the establishment of a BRICS development bank is being motivated by concerns about the World Bank’s hegemony and the in�uence of the US and Europe in the World Bank’s operations and decision-making processes.

Brown says BRICS countries may also have felt that developing countries could be more vulnerable during ‘periods of heightened developed country needs,’ su� as during the last global and eurozone crises. Bene�ts will be varied, he says, citing the ability of BRICS countries to tap into new and potentially �eaper sources of funds for development projects when acting together.

Jordaan says there are merits in establishing the development bank. is is because of the growing signi�cance of the BRICS bloc in the global economy, based on estimates by economists showing that BRICS economies now account for about 40% of global GDP.

‘In terms of rallying international decision-makers for the bene�t of the BRICS nations and �annelling foreign direct investment into developing nations in a more focused way, I would be supportive of this move,’ Jordaan says. He says the bene�ts of a BRICS bank lie in the unity of the governments of Brazil, Russia, India, China and

South Africa in coming together and forming a bank that will bene�t ea� participant, and developing countries outside of the BRICS fold.

‘It may be that this kind of sharing is far more e�ective than ea� country going [at] it alone. ere are likely to be synergies and learning opportunities for us from these large economies, whi� could be enormously bene�cial to the country and to the continent,’ he says.

FNB’s support for a BRICS development bank is not surprising. Its holding company – FirstRand – already actively participates in the banking markets in seven African countries, with prospects in Ghana and a mer�ant banking license in Nigeria. ‘FirstRand also now has a presence in Mumbai, India. e China and India corridor �ow of funds is critical in growing these African economies. As a group, we are therefore supportive of the South African government’s involvement in collaboration with the other BRIC countries to form a centre for banking expertise and investment into these developing countries,’ Jordaan says.

Jordaan warns of potential drawba£s, citing tensions that can come from the fact that the bank will have �ve partners with varying strength and pur�asing power. He sket�es a scenario where hypothetically China and India – because of their large economies relative to those of other BRICS countries – may be required to contribute more on a pro-rata basis if further capital

… the development bank is necessary as demand for funding in BRICS countries and other emerging economies will continue to be high, as these countries have pent-up demand to rehabilitate and build new infrastructure, su� as roads, power and water utilities.

SBV Services is a well trusted partner to the South African Reserve Bank, the retail industry and the banking sector.

We are able to meet an extensive range of customer needs through a combination of customised services including: • SecureCashinTransitforanybusinessthat deals with cash• WholesaleandRetailcashprocessingandmanagement• ATMservicesincludingreplenishment,custodianshipand frequency forecasting• Cashhandlingsolutions• Trainingservices• Guardingservicesforthebankingindustry• Riskconsultancyservicestailormadetoclient’s requirements.

SBV boasts a national footprint of more than 26 centres including operations in Lesotho and Nigeria, and is able to provide a valuable service through a combination of cutting edge technology and systems, more than 26 years expertise and the latest preventative risk measures.

We move the majority of cash in South Africa with the lowest number of incidents. Recognised as the industry leader, SBV was voted by LloydsofLondonasoneofthetoptwoCITcompaniesintheWorldintermsofRiskManagement.

Contact us today; and let SBV make a difference to your cash and risk management needs.

Experts in the cash value supply chain

RegisteredasaSecurityServiceProviderbythePrivateSecurityIndustryRegulationsAuthority,registrationnumber4082

Designe

dby

:Ind

igoMarketin

g

Highly trained professional employees

State-of-the-ArtTechnology

26 years industry expertise

Contact us todaySBV Services (Pty) Limited17,8thSt,Houghton,2198,Johannesburg, RSAPhone+27112832000Fax+27112832201Email: [email protected]


SUMMIT

was required. �is can potentially shi� the decision-making power within the bank to the highest contributors.

‘It will be important for South Africa to play an assertive role and to manage the power and strength of the other partners as they rally international decision-makers for their mutual bene�t,’ Jordaan says. ‘�e BRICS bank shareholders will need to get their heads around the need to make development of these �ve nations a priority, over and above being highly pro�table. �e goal here must be the bene�t of ea� country, rather than purely a pro�t motive,’ he says.

Adrian Cloete, an equity analyst at Cape Town-based Cadiz Asset Management says a BRICS development bank is required because the bloc’s member countries and other emerging economies still require signi�cant amounts of development capital.

He notes that global sources of capital, particularly for long-term capital projects, are becoming more di�cult to �nd owing to the impact of the last global �nancial crisis whi� has sapped the appetite for lenders to provide funding.

�is has been worsened by demands by regulators for banks to hold additional capital bu�ers against loans under Basel III, whi� became e�ective from January 2013 and will be implemented in phases until 2019.

Cloete says one can argue that the development bank is necessary as demand for funding in BRICS countries and other emerging

economies will continue to be high, as these countries have pent-up demand to rehabilitate and build new infrastructure, su� as roads, power and water utilities.

‘BRICS member countries will require development capital for long-term projects like infrastructure projects in the power, water, utilities and transport infrastructure (railways, roads, and so forth),’ says Cloete. ‘A BRICS development bank could be one source of funding for these types of projects. An example would be to develop a railway line to transport iron ore that could be exported to China,’ says Cloete.

Cloete says South Africa should bene�t from the institution. ‘It would be important to ensure that South Africa and other African projects get their fair share of the BRICS development bank project funding, so that infrastructure development in Africa keeps pace with the rest of the BRICS members,’ Cloete says.

Brown adds that bene�ts for South Africa and Africa would be access to new funds, probably in co-operation with local and regional institutions su� as AfDB.

‘Possible drawba�s might be the conditionality a�a�ed to loans (using BRICS service providers), as well as the cost and complexity of another institution when all these areas have existing development banks. Mu� will depend on the �nal detail of its constitution,’ Brown concluded. By Sure Kamhunga ■

�e bene�ts of a BRICS bank lie in the unity of the governments of Brazil, Russia, India, China and South Africa in coming together and forming a bank that will bene�t ea� participant, and developing countries outside of the BRICS fold.


CURRENT AFFAIRS

Pointing a �nger at others is a right. Pointing it at ourselves is a duty. In a recent panel an economist observed, accurately, that relations between government and business were at their worst since the 1990s. Part of the problem is that too many �ngers are pointing

outwards at others and not enough are pointing inwards.We are awash with economic recipes whi� assume that, if one

economic actor is allowed to tell the others what to do, our problems will be solved. For some, business must tell government what to do; for others, government or labour must tell business what to do.

�is fails to grasp a reality – that none of the actors can impose themselves on the others. Decades ago, a Wits academic, David Yudelman, wrote a book on the relationship between business and government in the early years of the last century, when they were seemingly at ea� others’ throats. His conclusion was that, although they were divided by language and political loyalties, business and government were forced to cooperate because they needed ea� other. �is is still true – in any market economy, government needs business to produce wealth and business needs government to preserve an environment in whi� that is possible.

We have been living in a democracy for nearly two decades, but many in business still seem unfamiliar with what this means.

Business and government: too many pointing fingers


�e real question for business strategy is not whether some people are saying threatening things – it is whether what is being said is ever likely to become reality.

The announcement in this year’s State of the Nation address that government is reviewing taxes was the cause of new lamentation about “uncertainty”.


CURRENT AFFAIRS

Labour must also be part of the conversation: those in business who want a world without unions need to look at resear� whi� shows what happens when unions lose their in�uence on a workplace; the result is �aos, not growth. �e same is true for the broader economy – if labour is excluded, the costs will outweigh the bene�ts.

�e obstacle to inclusive growth is not business, government or labour alone – it is all three and their failure to talk to one another.

One example is the conditions in whi� many Marikana miners live. Everyone agreed that their sha selement was a disgrace whi� may have contributed to con�ict – but all the actors blamed the others. �e mine said that it had made money available to local government, whi� did nothing. Government said the mine le� workers to fend for themselves a�er the hostel system ended and labour tended to agree. In reality, all three were responsible but none was willing to a nowledge this.

Yelling at the other parties may be emotionally satisfying, but it is a losing strategy because it ensures that no-one gets closer to a�ieving their goals. Progress will be impossible unless all parties a nowledge a need for new approa�es. But, since this is an article on business’s role, it will look purely at business aitudes whi� are in need of �ange. �ree issues are crucial if business is to protect its interests but also contribute to a more workable society.

LIVING WITH DEMOCRACYWe have been living in a democracy for nearly two decades, but many in business still seem unfamiliar with what this means.

Democracy is a system in whi� everyone is allowed a say – it is unrealistic to expect everyone to say what business would like them to say. People will be saying things business would rather not hear as long as we remain democratic. And so the real question for business strategy is not whether some people are saying threatening things – it is whether what is being said is ever likely to become reality.

In democracies, policies and laws �ange all the time. �is is why we have parliaments: to provide a platform for �anges. And so �ange is not threatening to business unless concrete government plans are published and are threatening. “Policy uncertainty” is a reasonable concern if there are wild and unexplained swings – not if �ange happens in a predictable framework.

On the �rst score, for mu� of last year, business sentiment was negative because some people in the African National Congress (ANC) were talking about nationalisation and it refused to shut them up. And yet there was no sign that the government was shi�ing its position. On the second, the announcement in this year’s State of the Nation address that government is reviewing taxes was

Cash-based collateral dethroned

In a world scarred by the events of 2008, considerable questions have been raised regarding asset safety, the mitigation of counterparty credit risk, the protection and use of collateral and greater demands on transparency within the financial services arena.

New regulations will be enforced to mitigate many of the risks in the greater market regarding capital adequacy. Basel III, Solvency II and Regulation 28 of the Pension Funds Act are examples of these regulations that will place a greater emphasis on the retention of liquid assets on the balance sheet of South African financial institutions. This will increase the need to collateralise financial transactions, forcing banks to retain greater cash reserves and increase capital adequacy ratios.

The trend globally in response to regulations such as these has been to rather substitute high-quality liquid securities as collateral for cash as far as possible. Recent published articles have alluded to the likely possibility of a shortage of high-quality eligible collateral, particularly cash, which is the most common form currently utilised in the South African financial markets.

Collateral is a key risk-management tool used to manage credit and counterparty risk. It is common to re use collateral received against other financial exposures. However, the current bilateral nature brings with it limitations, such as the incomplete overview of placed and received collateral, as one counterparty can only “see” their collateral as far as their direct counterpart. There is often uncertainty relating to the size of the collateral, where it has been reused and how it can be traced throughout its movements to the final holder.

The fungible nature of cash used as collateral also brings with it uncertainty of recovery in the event of financial failure of the counterparty receiving the collateral.

There are complexities when using securities as collateral, such as daily collateral calls, corporate actions, manual collateral substitutions, management of eligibility criteria and collateral valuations. This can be administratively intensive and the build-up of collateral silos across financial products also leads to inefficient use of collateral or over collateralisation. Studies show that in 2007 global defaults on debt were US$8 billion (approximately R54.64 billion), which spiked to over US$400 billion (approximately R3.98 trillion) a year later – when the financial crisis hit.

According to Finadium, a specialist research and advisory firm in the securities and investments industry, failure to effectively manage and implement effective and efficient collateral management systems could result in the loss of financial and revenue opportunities.

There is a growing demand for more automated solutions, focusing on solutions that streamline processes and improve operational efficiencies. The focus and trend internationally is to adopt a single, centralised market-wide collateral management system that manages the members’ pool of exposures against the members’ pool of collateral placed.

The South African financial market is looking at a centralised, market-wide multi-asset class integrated collateral management solution. This complies with local regulations and complements current collateral management functions within financial institutions, and is aimed at improving the tracking and efficient use of collateral management in South Africa.

The Tri-Party Collateral Management service, which is being driven by Strate as South Africa’s licenced Central Securities Depository (CSD), will manage eligible dematerialised bonds, equities and money markets in multi-currencies.


CURRENT AFFAIRS

the cause of new lamentation about “uncertainty” despite the fact that there is no evidence yet that the �anges will harm business. In any event, the record here shows that �ange is always negotiated so business always has an opportunity to say what it thinks once the details are published.

Democracies are environments in whi� many voices are heard. Politicians in democracies cannot be expected to silence voices. Business needs to judge democratic governments on what they do, not on whether everyone expresses business-friendly sentiments. Business strategy would be more e�ective if more a�ention was given to understanding government, making businesses be�er able to know real threats from the illusions, than to hoping in vain that politicians will say only what businesses want to hear.

RECOGNISING REALITY: TAKING POVERTY AND INEQUALITY SERIOUSLY It is di cult to talk seriously about our economic �allenges if we do not take poverty and inequality seriously.

An outsider looking at our national debate might feel that we are obsessed with poor people: just about everyone who makes a policy proposal insists that it will help the poor. But most of this is empty sloganeering designed to hide self-interest. One example is the mantra that union wage demands should be curbed because they exclude the poor from jobs: there is growing evidence that wages are o�en used to feed eight or nine mouths and that many unemployed people would be a great deal worse o� if wages were lower.

Among business people, inequality, if it is mentioned at all, is o�en used to point out the di�erence between the living standards of politicians and the poor: private incomes are assumed to be reward for hard work and skills.

But we are still far from a society in whi� everyone receives a fair reward. �e e�ects of centuries of racial exclusion from education and business opportunities do not disappear in 18 years and the playing �eld is still far from level. �e a�itudes produced by an order in whi� people of a particular race do all the skilled work while others use only their muscles also do not die qui�ly, and so there are still glass ceilings whi� bar talented bla� people from making a full contribution to the economy.

So a key area for business concern is how to ensure that the private economy recognises and rewards talent.

It has become trite to point out that executive salaries are o�en a serious obstacle to progress. It is not credible to tell workers that only a 10% increase is possible when executives have received over 20%. Nor should we be surprised when unsecured lending grows if the message whi� many in business and government send out to the rest of society is that the test of human worth is how mu� wealth people can �aunt.

�ere is mu� room for moderating top-end salaries without a�ecting anyone’s standard of living. And yet, a proposed voluntary

pay freeze for a year by government and business leaders is trashed as a drain on the �scus.

�is is not an ideological point. In many market economies, business leadership is careful to practice restraint in earnings and consumption to retain society’s con�dence. It is hard to see us progressing economically if this does not begin here.

ACCEPTING COMPROMISE�ese are but two examples of a broader point o�en lost in our debate: negotiation does not mean ge�ing the other interests to endorse what you want, it means meeting them halfway, and that means looking at our �aws as well as theirs.

We are told, repeatedly, that business should protect its interests by being more vocal in its criticism of government (and, presumably, labour). Business, like any other interest, has a right to say what it wants. But that is only half the story. Listening to and understanding the other side’s position is equally important. Government, for all its �aws, is subject to pressures whi� business does not face, su� as the need to retain the support of a constituency. It is not realistic to expect unions to rubber stamp business positions. �erefore, a key

to productive negotiation is understanding the other side and its concerns – whi� also requires recognising

that some criticism of business is justi�ed. And if other interests take business’s concerns seriously, this needs to be a�nowledged. When the ANC leadership tried at its December conference to calm business by removing alarming language from resolutions, mu� of the reaction was �urlish – government was lectured on the need to do more despite the fact that

the politicians had taken risks to send more business-friendly messages. �is failure to a�nowledge shi�s by the other

side may have played a role in creating antagonism between business and the ANC this year.

Compromise remains our surest way forward. But we will not begin to make it work until we do far more to understand the logic of the other side’s position and the weaknesses in what we, ourselves, do and say. By Professor Steven Friedman ■

Professor Steven Friedman is Director of the Centre for the Study of Democracy at Rhodes University and the University of Johannesburg. He is an academic, columnist, civic activist, and former trade unionist, and now specialises in the study of democracy and has written extensively on the relationship between democracy, social inequality and economic growth.

It is not

credible to tell

workers that only a

10% increase

is possible when

executives

have received

over 20%


CUSTOMER STORY

Unsecured loans, normally o�ered without the need of property as surety, generally carry more interest than secured loans partly due to the risk. Currently on an unsecured loan, a credit provider can �arge interest of up to 31% a year, depending on the credit

score of the client. A home loan, whi� is considered secured, will carry an interest rate of up to 16% at the current repo rate.

Another question that ba�es customers is why a bank would only qualify a customer for a home loan that covers 90% of the property value, yet approve a high-interest-yielding unsecured loan to cover the outstanding 10%. Is it simply an issue of generating the highest interest possible?

One of the South Africans affected by these apprently contradictory policies is Ms Mbiya (not her real name). She informed Banker SA that she was denied a home loan by one of South Africa’s big-four banks, despite her current rent being R3 000 more than her monthly bond repayments would have been. She was told she did not qualify for a home loan although she had records of consistent rental payment. Ms Mbiya concedes that there may be a blemish on her credit record a�er a dispute over a cellphone bill, but wonders whether this is serious enough to disqualify her for a home loan. �e record of that dispute did not stop a bank �nancing the pur�ase of her new vehicle. But what astounded her was the fact that, at the time her home loan application was turned down, she was o�ered an unsolicited personal loan of up to R120 000 from another bank.

Underscoring the seriousness of this ma�er, last year in a joint statement titled ‘Ensuring Responsible Market Conduct for Bank Lending’, the National Treasury and �e Banking Association

Application deniedSouth Africans have been raising concerns that local banks appear to grant unsecured credit much more readily than home loans. From some individual customers’ viewpoints this is baf�ing and seems driven by a sel�sh interest to generate more income.

South Africa raised concern that certain banks were ‘selling inappropriate credit products to maximise margins,’ including the use of ‘expensive unsecured lending for house renovations instead of �eaper mortgage loans’.

Although there is nothing illegal in o�ering more unsecured loans than home loans, is it moral for banks to behave in this manner, in a developing country where many people do not have homes that can be used as collateral to create more value?

Ewald Kellerman, the head of sales at FNB Home Loans, points out that the quali�cation criteria for di�erent credit agreements di�ers and the assessment criteria for credit agreements has to comply with the requirements of the National Credit Act.

‘Home Loans, for instance, are assessed on the customer’s a�ordability – the ability to repay, the credit history, conduct of accounts and on the property,’ Kellerman explains. ‘Because of the large size of these agreements, the term, and the risk that something might happen in the 240 months [20 years] of the agreement, banks are typically more reluctant to grant �nance than with credit cards for instance.’ says Kellerman.

‘Lastly, the minimum size of these loans di�er substantially, and below a certain income band a customer may not �nd the right asset to buy. It is therefore likely that a customer may qualify for a personal loan, perhaps even a vehicle, but not a home loan.’

On the issue of Ms Mbiya having a ¤awless record in meeting her rental payments, Kellerman says that a home loan agreement does not carry the same risk as a rental agreement.

‘With a home loan it is imperative to prove the customer’s ability to repay and continue to meet the obligation, while a rental


Note counters from R5450 Coin sorters from R2995

Counterfeit detectors from R295

Contact details; Phone 0861 333397 Fax 086 7627817Email [email protected]

Coin counters from R4995Note sorters from R24990

Note validators from R3495

ONE YEAR WARRANTY, FREE SHIPPING WITHIN SOUTH AFRICA

BEST PRICES, BEST PRODUCTS AND BEST SERVICE

29

CUSTOMER STORY

Edition 5 BANKER SA

agreement does not require the same assessment. As an example, an unemployed person starting his rst job away from home can sign a rental agreement and move into the property, paying the monthly rental with po�et money from his parents, but will only be able to qualify for a home loan once he earns a salary and can prove that he can a�ord the repayments.’

Kellerman says that banks do look at the behaviour of the customer in meeting other credit and revolving commitments, including rent, and the way the customer manages their transactional accounts. However, he notes that owning a home may cost more than rental payments, as the owner may need to pay for maintenance, rates and taxes and in certain instances levies if the customer lives in a complex.

On the question of banks selling more unsecured credit at the expense of home loans and due to the high margins, Kellerman says the business case for ea� credit product has its own merits and FNB is commi�ed to lending responsibly.

A senior banking o�cial Banker SA spoke to notes that one of the factors that has led to more unsecured loans being granted in South Africa is the high demand for them.

‘Borrowers have, for various reasons, put themselves in a situation where their risk prole has deteriorated and they are unable to manage long-term debt. Some of these reasons are the impact of a slow economy, increases in administered prices and using secured credit instruments to their maximum. Borrowers are thus moving into the unsecured credit environment because they are able to manage short-term credit,’ adds the o�cial, who asked to remain anonymous.

On the morality of o�ering more unsecured loans than the ones that are secure, he says: ‘�e moral issue to be raised is what we, as a country, are doing about the circumstances that lead to over-indebtedness and a culture of instant gratication, despite consequences of debt.’

Lesiba Mashapa, company secretary of the National Credit Regulator, concurs that there is no requirement in the National Credit Act compelling credit providers to o�er a special type of credit. Mashapa says that credit providers are free to o�er any type of credit provided in terms of the National Credit Act, but he notes that the National Credit Act empowers the consumer to ask for reasons why credit has been refused.

On the question of unsecured lending being easily accessible than secured lending, Mashapa adds: ‘One of the factors may be the la� of deposit requirements for unsecured credit when compared to mortgage agreements. �e maximum interest allowed for a home loan is lower than that for an unsecured loan.’

Asked why someone with a good rental repayment history would be denied a home loan that requires lesser repayments than the rental costs, Mashapa responds: ‘In terms of Section 60 (2) of the National Credit Act a credit provider has the right to refuse to enter into a credit agreement with any prospective consumer on reasonable commercial grounds that are consistent with its customary risk management and underwriting practices. On request from a consumer, a credit provider must advice a consumer in writing of the dominant reason for refusing to enter into a credit agreement with that consumer.’ By Phakamisa Ndzamela ■

‘With a home loan it is imperative to prove the customer’s ability to repay and continue to meet the obligation, while a rental agreement does not require the same assessment.’

SECTION 62 OF THE NATIONAL CREDIT ACT STATES:(1) On request from a consumer, a credit provider must advise that consumer in writing of the dominant reason for- (a) refusing to enter into a credit agreement with that consumer; (b) offering that consumer a lower credit limit under a credit facility than applied for by the consumer, or reducing the credit limit

under an existing credit facility; (c) refusing a request from the consumer to increase a credit limit under an existing credit facility; or (d) refusing to renew an expiring credit card or similar renewable credit facility with that consumer.(2) When responding to a request in terms of subsection (l), a credit provider who has based its decision on an adverse credit

report received from a credit bureau must advise the consumer in writing of the name, address and other contact particulars of that credit bureau.

(3) On application by a credit provider, the Tribunal may make an order limiting the credit provider’s obligation in terms of this section if the Tribunal is satisfied that the consumer’s requests for information are frivolous or vexatious.

How is the interest cap on unsecured and secured loans calculated in accordance with the National Credit Act?Home loans interest cap = repo rate x 2.2 + 5%Unsecured loans interest cap = repo rate x 2.2 + 20% for term loans longer than 6 months.

For more information, please visit fl ysaa.com

We’re working hard to reduce our carbon footprint, and now you can join us. Through our new Carbon Offset

Programme, you can simply select the checkbox when booking online, and a small charge will be added to your

ticket. The money is transferred to IATA and used on environmentally sustainable projects in Africa and worldwide.

South African Airways. Bringing the World to Africa and taking Africa to the World.

FLYING SHOULD NOT COST US THE EARTH.

7225

4B

SA

A G

RO

UP ENVIRON

ME

NTA

L AFFAIRS•

FLYING SHOULDN’T COST THE EARTH

72254B-Carbon Footprints Print Advert -Flamingos- For SA Banker.indd 1 2012/12/12 2:56 PM

IT

Retail banks across the globe will see IT spending grow 3.4%, rea� ing US$118.6 billion in 2013, as � ief information o� cers (CIO) focus on customer satisfaction and revenue growth. � is is according to global industry analysts Ovum.

Ovum � nds that European banks are lagging behind their North American and Asia-Paci� c counterparts, with just 1.8% growth expected, compared to 3.3% and 5.1%, respectively.

In a new Business Trends report, Ovum suggests that within Europe, the optimistic shi� towards greater IT spending signals a reduction of the cost-cu� ing measures seen previously by the global banking industry. Instead, a focus on digital � annels, su� as online and mobile banking, and digital marketing activities, will enable them to improve customer satisfaction and revenue growth strategies and fuel cross-selling and upselling opportunities in the short and mid-term.

Among the digital � annels, mobile banking is the clear IT investment priority in 2013, as retail banks a� empt to capitalise on the features unique to mobile, su� as location-based services. Ovum’s forecasts show the Other Channels category, whi� includes mobile banking, will grow 4% in Europe in 2013, and rise at a compound annual growth rate of 6% between 2013 and 2017. Overall, spending on online � annels in this region (including traditional online banking services and mobile-browser-based banking services) is set to grow 4.2% in 2013. In parallel, to compete in the digital world, a number of retail banks will shift their “bricks and mortar” marketing activities online.

Elsewhere, Ovum’s Business Trends report reveals that credit risk management and data privacy will become key regulatory compliance drivers of IT spending in 2013, with global investment

into Management Information Systems predicted to rea� $6,4 billion over the course of the year, and $2.2 billion of spending in Europe alone over this year. � is accounts for 5.5% of overall IT spending by European banks.

‘� e optimistic signs on the economic horizon are driving the shi� away from cost-cu� ing and towards investment strategies within the retail banking sector,’ comments Jaroslaw Knapik, senior analyst, Financial Services Te� nology at Ovum. ‘Whilst regulatory compliance has certainly fuelled a signi� cant amount of the investment predicted in our forecasts, it is by no means the sole driver. � e level of investment in digital � annels gives a clear indication that banks are fully cognisant of the growing expectations of their customers, as well as the opportunities they present.’ ■

(US)$118.6

billion

2013 Global

retail banking

IT spend to hit

Moving away from cost cutting, retail banks increase IT spending as they focus on customer satisfaction and revenue growth.


INFOSYS: BANKING TRENDS FOR 2013Analytics gets real time, and mobility is a priority: banks will combine existing and real-time information of a customer, transaction and product to integrate it with applications like location-based services.

The core evolves from transaction to intelligence: Transaction history will emerge as a way to identify new product/service requirements or push contextual offers.

Socialising pays off with a new revenue stream: social media goes from customer care to new selling opportunities – powered by peer recommendations, personalised services, and co-creation of products.

Banker, retailer, telco, technologist: banks go from collaboration to co-creation, with new services and products that combine offerings from banking and non-banking entities.


LEGAL NOTES

Project bonds: the future of infrastructure �nance in South Africa?The time is ripe for the injection of fresh life into South African infrastructure investment.


Throughout the world, governments have embarked on major infrastructure investments following the global �nancial crisis and the resultant economic downturn. �ese initiatives are designed to cushion, if not reverse, the rapid slide into economic recession.

Governments are also a�empting to �ll the gaps that have emerged as banks, other �nanciers and major equity investors turn o� the funding tap for many infrastructure projects.

‘Locally, the time is ripe for the injection of fresh life into South African infrastructure investment, but borrowers will have to start looking beyond the banks to alternative sources of funding,’ says Riard Roothman, head of Banking and Finance at Werksmans A�orneys.

‘Project bonds, an asset class that is still untapped in this country, could be a viable alternative means of �nancing infrastructure projects,’ Roothman suggests. ‘�ese bonds allow access to large international po�ets of non-bank money and could potentially �ll some of the gaps being le� by international banks scaling down their involvement in the project �nance arena.’

One potential bene�t of project bonds is that they can enable the �nance recipients to have more of a hand in the �nancing strategy than is o�en the case, particularly when funds are sourced from the international community.

Project bonds are typically debentures used to �nance project and infrastructure transactions, and are issued with a long maturity, usually longer than 10 years. �is is in contrast to the tenure of �ve to seven years for corporate bonds and bank loans, the more traditional means of �nancing projects.

Roothman says the tenure of project bonds would not appeal to all investors, speci�cally to those with an appetite for long-term investments, notably pension funds and insurance �rms.

PROJECT BONDS ADVANTAGEOUS FOR BORROWERS AND INVESTORSAt this particular juncture, project bonds could be advantageous for borrowers and investors alike as the capital markets are not contending with the same cost and regulatory constraints as the banking sector.

‘Banks need to bear higher liquidity and capital holding costs as a result of Basel III, and this has pushed up the cost of lending,’ says Roothman. ‘Additionally, faced with the Eurozone crisis, European banks’ credit commi�ees have less appetite and are taking a mu more conservative approa towards long-term lending.’

While the position of South African banks is more positive, local banks have a clear preference for shorter-dated assets, typically of �ve to seven years’ duration, and so are less likely to step into the funding gap le� by international banks.

‘Also, the funding available from local banks may be streted because of demand for �nancing from bidders in the renewable energy programme for independent power producers,’ Roothman says.

�e state-owned Industrial Development Corporation (IDC) may have provided a glimpse of things to come when it raised �ve billion rand for the funding of renewable-energy projects by selling bonds

in a private placement to the state pension-fund manager. �e bonds are to be paid in tranes over 14 years as the projects progress.

‘As an alternative source of funding for capital-intensive projects, project bonds are well worth looking at,’ he says. ‘�ey have been used successfully in markets su as Europe, Latin America and the Middle East. In South Africa, if transactions are properly structured to address the issue of construction risk, there should be signi�cant potential and appetite for project bonds among investors,’ Roothman adds.

Construction risk refers to the initial period in whi the project is built or constructed, usually the �rst three years, when the risk to investors is highest because no cash �ows are being generated yet and construction could be delayed for a wide range of reasons or ultimately fail.

Roothman says investor concerns about construction risk can be addressed through upfront credit enhancement in the form of subordinated debt, or through guarantees from third parties, whether government or development �nance institutions.

ACCELERATING GROWTH‘I think there is a place in South Africa for project bonds. �e expertise is available, there must be appetite and there is certainly a need for alternative sources of project �nance provided that the bonds are structured in su a way as to minimise investor concerns. Project bonds could supplement existing infrastructure funding and help deliver the growth boost for whi politicians and economists are looking at infrastructure investment to deliver,’ states Roothman.

‘�e question is: who is going to be �rst to test the waters?’ he says in conclusion. ■

Milpark Business School is registered with the Department of Higher Education and Training (DHET) as a Private Higher Education Institution (No 2007/HE07/003) and is provisionally registered with the DHET as a private FET college (No 2009/FE07/058) valid until 31 December 2015.

MILPARK BUSINESS SCHOOL ACHIEVEMENTS

• The Number One Private Provider of the MBA degree and fifth in the overall rankings of accredited business

schools. (2012 PMR.africa national survey on accredited business schools offering MBA/MBL degrees in SA)

• A complete learning path is provided for financial advisers/planners from NQF level 4 to NQF level 8.

• Milpark’s qualifications are recognised by the Financial Services Board (FSB) for FAIS Fit and Proper purposes.

To register, visit www.milpark.ac.za or contact a consultant at the nearest campus for assistance.

CT 021 673 9100 | JHB 011 718 4000 | DBN 031 266 0444

NEW BCOM DEGREE OFFERS MAJOR IN BANKING

BUILD YOUR BANKING CAREER WITH THE RIGHT QUALIFICATION AND SKILLS TO SUCCEED

A degree in commerce with a major in banking will open doors for you in the corporate and investment banking environment. The Milpark BCom also responds to the qualification needs of the financial services industry and legislation such as the Financial Advisory and Intermediary Services (FAIS) Act.

Offering a broad educational foundation for a business career, with two possible areas of specialisation - Banking or Financial Planning, Milpark Business School will give you a headstart.

Milpark Business School is registered with the Department of Higher Education and Training (DHET) as a Private Higher Education Institution (No 2007/HE07/003) and is provisionally registered with the DHET as a private FET college (No 2009/FE07/058) valid until 31 December 2015.

MILPARK BUSINESS SCHOOL ACHIEVEMENTS

• The Number One Private Provider of the MBA degree and fifth in the overall rankings of accredited business

schools. (2012 PMR.africa national survey on accredited business schools offering MBA/MBL degrees in SA)

• A complete learning path is provided for financial advisers/planners from NQF level 4 to NQF level 8.

• Milpark’s qualifications are recognised by the Financial Services Board (FSB) for FAIS Fit and Proper purposes.

To register, visit www.milpark.ac.za or contact a consultant at the nearest campus for assistance.

CT 021 673 9100 | JHB 011 718 4000 | DBN 031 266 0444

NEW BCOM DEGREE OFFERS MAJOR IN BANKING

BUILD YOUR BANKING CAREER WITH THE RIGHT QUALIFICATION AND SKILLS TO SUCCEED

A degree in commerce with a major in banking will open doors for you in the corporate and investment banking environment. The Milpark BCom also responds to the qualification needs of the financial services industry and legislation such as the Financial Advisory and Intermediary Services (FAIS) Act.

Offering a broad educational foundation for a business career, with two possible areas of specialisation - Banking or Financial Planning, Milpark Business School will give you a headstart.

35

TRAINING

Edition 5 BANKER SA

The transformation of our country through the creation of a more equitable society and the provision of opportunities for previously-disadvantaged people has training at its core. Providing appropriate education and skills development opportunities to bla� people,

women and the disadvantaged is essential if they participate properly and centrally in the running of the economy in general, particularly in the banking industry. �ere has obviously been some progress in this regard as the race pro�le of the sector has shown a signi�cant shi�.

In 2000, the �rst Banking Sector Skills Plan recorded 19% Africans, 14% Coloureds, 8% Asians and 59% Whites as employees in the sector. By April 2011, the number of Africans was up to 41%, Whites down to 29%, 12% of employees were Asians and Coloureds comprised 17% of employees. In 2011, the banking sector employed 1 895 people with disabilities whi�, while still not really impressive, is apparently also a signi�cantly larger number than previously. Of course, these are overall statistics and say nothing about the level of employment of the various groups. Recognise that I could be wrong, but I suspect that overall previously more advantaged groups, especially whites, still dominate senior positions. Nonetheless, the banking industry must be given credit for the progress that has been made. I expect that the BANKSETA has played a role here – I certainly hope so – and that it will continue making a contribution towards making the banking representative of the South African population.

SETAs can expand opportunities for initial professional training for youth with academic potential but insu�cient funding – or help institutions strengthen their capacity to provide training in key areas where it is di�cult to develop scarce and critical skills. A recent, good example of this is provided by the BANKSETA whi� recently, in partnership with the University of Zululand and the South African Institute of Chartered Accountants (SAICA), embarked on a programme to assist previously-disadvantaged students to enter the Chartered Accountancy profession. Fi�y students have been fully funded for the duration of the programme, and will be followed by a further intake of 100 students over the next three years.

�is programme is providing opportunities to bright but poor,

Transformation hastraining at its coreBANKSETA has a particularly big responsibility, says Minister of Higher Education and Training Dr Blade Nzimande.

bla� youngsters to embark – with �nancial, social and academic support – on a career in a scarce and critical skill in a part of the country where su� training was previously unavailable. In addition, BANKSETA has supported the University of Fort Hare Financial Markets Programme since 2009 by means of bursaries and economics capacity building. �ese and similar programme contribute importantly to building the skills of our people.

Of course, skills need to be built not only for professionals and managers and BANKSETA has a role at all skills levels, from clerks to senior executives. One of the biggest skills shortages in our country is that for mid-level skills and we expect all the SETAs, the colleges and the universities to ta�le this �allenge with vigour.

�e BANKSETA has a particularly big responsibility in our country at this time. Banks are at the heart of the �nancial sector and the �nancial sector is, for be�er or for worse, at the centre of the economy.

A study commissioned by the World Bank, published in Mar� 2012, notes the extraordinarily rapid expansion of the �nancial sector in South Africa in the �rst decade of this century. In 2008, this sector was responsible for 13% of GDP as opposed to 6% only four years earlier, in 2004. �is suggests a rapid growth of a demand for skills. Excerpted from Minister Nzimande’s address to BANKSETA’s 5th international conference, 2012.

For the full address visit www.bankseta.org.za. ■

Dr Blade Nzimande


COMPANY FOCUS

HOW IS SWIFT’S AFRICA SOUTH REGION STRUCTURED?SWIFT is an international company with a number of regional o�ces. �e objective of establishing regional o�ces is part of SWIFT’s drive to become more customer-

centric and to develop an appreciation of market requirements in di�erent regions. �e Africa South o�ce is located in Johannesburg, from where we service the majority of sub-Saharan countries. �ese can broadly be de�ned as stret�ing from �e Gambia in the West to Kenya in the East, and all countries to the South. �e region also includes islands su� as the Sey�elles, Madagascar and Mauritius.

�is is a vast region and it does pose a �allenge to remain “close to the market”. We have, therefore, allocated every country to a country manager, who is responsible for all customers in that country. We have also appointed a business partner, Trustlink, to support our country managers in the di�erent countries. In addition, the SWIFT communities in di�erent countries have formed their own User Groups and we work closely with these. I believe that this structure enables us to develop close relationships with our customers in di�erent countries and to proactively identify �allenges and opportunities so that we can provide the required services to our customers.

HOW DOES THE BUSINESS YOU DO IN THE AFRICA SOUTH REGION BREAK DOWN BY TYPE? SWIFT is traditionally known for its secure and reliable �nancial messaging service, and this remains core to our service o�ering. But we have always strived to optimise the value that our customers derive from SWIFT by reducing cost of ownership, and providing solutions and services that unlo� further value from our traditional services.

In this regard, SWIFT continues to develop its products and services. For example, we have recently laun�ed integration solutions to enable straight-through-processing, a sanctions screening service and a suite of business intelligence solutions. We also �nd an increasing demand for consulting services, both te�nical and business.

�ese o�erings represent a growing share of SWIFT revenues. By end-2012, for example, earnings from these non-network-based products and services had already gained parity with messaging-based revenues. Over time, we expect our non-network portfolio to account for a greater share of our revenues.

DO YOU SEE A POTENTIAL FOR FURTHER GROWTH HERE?Absolutely! Africa is widely recognised as the new frontier for economic growth and, as the region’s banks and �nancial markets grow, we expect message tra�c to rise and to see growing demand for our connectivity products. We see particular potential for our

Bringing momentum to African integration projects

Q & A with Hugo Smit, Head of Africa South, SWIFT

consulting and services o�erings. In Africa (as elsewhere), �nancial institutions need te�nical and business support around systems integration and to reduce cost and risk through automation. Banks are also looking for data-based business intelligence to support strategy. We can help with all of these requirements, so we are seeing a signi�cant increase in demand for our consultancy and training services.

�e various regional integration projects also provide opportunities to o�er solutions and services that enable greater inter-operability and ensure that the underlying systems and infrastructures meet international standards.

Our focus remains to enable communities to unlo� optimal value from their existing investment in SWIFT, and I believe that we still have to o�er a lot in this regard.

DO YOU SEE ANY TRENDS IN FINANCIAL MESSAGING GROWTH?Within SWIFT’s Europe, Middle East and Africa region, Africa is the fastest growing sub-region for payments tra�c, with 11.8% growth. But within Africa we are seeing �anges. Financial messaging in Africa has traditionally been dominated by South Africa, but growth there is now being outpaced by growth in messaging volumes elsewhere. In the year to November 2012, for example, total South African tra�c (payments and securities) grew by 3.1%, versus 20.5% in Ghana, 19.5% in Uganda, 16.9% in Tanzania, 17.1% in Zambia and 13.2% in Nigeria. We expect these higher growth trends across other parts of Africa to continue.

HOW DO YOU DO THINGS DIFFERENTLY TO COMPETITORS? Being a member-owned cooperative has de�ned SWIFT’s unique community approa�, whi� provides a global forum for the banking industry and seeks solutions for the industry’s common �allenges. In addition, we work closely with communities in the local markets through SWIFT’s regional conferences and operational forums.

We also collaborate with communities around projects su� as the regionalisation e�orts mentioned already. As a result, we o�er community-based solutions or services that enable us to tailor our o�erings to a community’s speci�c requirements. Another example of our community approa� is the Sanctions project in Ghana, where almost all banks have subscribed to SWIFT’s Sanction Screening services. In this case, working with the community provided signi�cant bene�ts in terms of implementation time frame and costs.

WHAT ARE THE NEW CHALLENGES FACING THE BANKING INDUSTRY? Te�nology is a major �allenge for the industry. It is �anging faster than ever before. �ere is also the unprecedented pressure


on pro�tability and costs that our customers are facing. Across the industry, �nancial institutions face growing competition in mobile payments, are seeing margins shrink, and have to comply with ever more complex regulation. More and more of our customers – and the industry – are looking to SWIFT to help them address these pressures.

ANY MAJOR PROJECTS IN THE PIPELINE FOR THE BANKING INDUSTRY IN THE REGION? Ghana’s community-based Sanction Screening project was initiated in 2012 and full implementation will be completed in 2013. �is is a very exciting project and I think that, upon completion, it would make an interesting case study of what bene�ts can be derived from a community-based approa� to regulatory compliance.

�ere are also a number of RTGS systems to be implemented in the West African Monetary Zone region during the course of 2013, including Nigeria, where a lot of progress has been made in the

implementation of SWIFT for the country’s messaging system. We will collaborate with the central bank and its service providers in order to meet the project’s �allenging deadlines, but we are looking forward to this.

SWIFT is involved in three of Africa’s regionalisation projects, namely WAMZ, EAC and SADC. Whilst not detracting from WAMZ and EAC, I am especially excited about the SADC project. Over the past two years, huge strides have been made in this project and a pilot implementation involving �ve countries is planned for 2013. What I �nd interesting is that the project team has not only considered the systems requirements for the regional RTGS system, but has also taken an holistic view of services to be o�ered to participants in order to optimise the value that they would derive from this project. In addition, the project team has succeeded in maintaining a high-level of commitment from participants, whi� is a prerequisite for a project of this nature.

ON 18 MARCH, SWIFT, the �nancial messaging provider for more than 10 000 �nancial institutions and corporations in 212 countries and territories, announced the appointment of Trustlink a Business Partner for West, Central and Southern Africa.

Commenting on the appointment of Trustlink, Hugo Smit, Head of Africa South, SWIFT, says, Business Partners play an important role as SWIFT grows rapidly across the African continent: ‘SWIFT has seen signi�cant business growth throughout West, Central and Southern Africa over the last few years, with tra�c growth from this region consistently outperforming global tra�c growth. Tra�c from this region, excluding South African �gures, has grown by more than 30% since 2009. We are also experiencing a growing need for SWIFT products and services, with revenue from these sources making up 50% of total revenue. We remain commi�ed to grow our footprint in this region, but we recognise that o�ering new products and services is not su�cient: we also need to maintain close customer relationships. Partners are essential to complement our rea� and to ensure we maintain a high standard of customer service.’

Denis Kruger, SWIFT Channel Manager for the region, comments: ‘SWIFT and Trustlink already have a close working relationship that has been developed over a number of years. We have always appreciated the high standard of services, commitment and professionalism of Trustlink and I look forward to strengthening our relationship even further.’

Tertius Vermeulen, CEO at Trustlink, adds: ‘Trustlink is delighted to be appointed as a Business Partner for SWIFT covering the sub-Saharan Africa region. �e appointment as Business Partner extends

the portfolio of SWIFT products and services that we can o�er to customers and also extends our rea� into West Africa. �is creates exciting opportunities for both parties and we remain commi�ed to work closely with SWIFT in order to provide a high quality of services to SWIFT customers.’

As extension of the SWIFT Johannesburg of�ce, Trustlink will deliver the full range of SWIFT’s products and services.

For more information, please contact SWIFT via Atmosphere PR on (+27) 82 825 3262, or e-mail [email protected] / visit www.swift.com.

ABOUT SWIFTSWIFT is a member-owned co-=operative that provides the communications platform, products and services to connect more than 10 000 financial institutions and corporations in 212 countries and territories. SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.

ABOUT TRUSTLINKTrustlink provides innovative solutions and services that enable our customers to enhance information exchange and business process integration beyond the borders of the enterprise. Trustlink is the exclusive representative in sub-Saharan Africa for select suppliers that are all recognised global leaders in their respective fields. Using the products of our partners as well as our own in-house solutions, Trustlink develops and tailors integrated STP, B2B and EAI solutions. Trustlink also operates the leading SWIFT service bureau in Africa.

SWIFT APPOINTS TRUSTLINK BUSINESS PARTNER FOR WEST, CENTRAL AND SOUTHERN AFRICA


INDUSTRY SURVEY

Re�ecting on the release of the Deloi�e 2013 Banking Industry Outlook, Roger Verster Financial Services Industry country leader at Deloi�e noted that banks were presently coping with the introduction of the most comprehensive set of regulations that the

global nancial services industry has seen in 70 years.‘Even though our banks were not responsible for, nor directly

involved in the �allenges that enveloped the global economy, they are caught by the fact that they are active players in a regulated global market. �ey therefore have to contend with the regulatory and economic a�ermath that has resulted,’ says Verster, adding that current trends in the banking industry have implications for South Africa.

‘A common element that comes across in trying to a�ieve the quest of meeting regulatory demand, providing a be�er customer experience and uncovering growth opportunities is that of data says Verster. It is now essential that the long-held goal of structuring and pu�ing to use the huge amounts of data generated by South African banking is e�ectively resolved,’ he says.

‘�e nancial services industry has become a te�nology business and the e�ective and creative utilisation and analysis of the massive amounts of data they have access to, will be one of the key �aracteristics that will di�erentiate the future winners from the losers in banking. Although cost containment will continue to be an area of focus, especially given the relatively high cost to income ratios in South African banks, there is a point at whi� it becomes di�cult to drive costs down sustainably.’

‘In common with their global counterparts local banks must continue to focus on driving di�erentiation and excellence in serving their customers. �ese initiatives will support them as they

The Deloitte 2013 Banking Industry OutlookInternational banks, beset by a myriad of new regulations and the negative impacts of the �nancial crisis, are �nding it increasingly challenging to provide improved returns for shareholders. What is of concern is that this scenario is having a similar effect on South Africa’s banks.


In common with their global counterparts local banks must continue to focus on driving di�erentiation and excellence in serving their customers.


INDUSTRY SURVEYmove to comply with existing and impending consumer protection regulations while at the same time helping to retain and grow their customer base, in an increasingly well-informed and demand-driven market,’ says Verster.

�ere is a need, he says, to limit the spiralling cost of compliance by creating opportunities for e�ciencies and alignment within the business. He adds, however, that given the prevailing regulatory climate, it is unrealistic to expect the cost of compliance to signi�cantly reduce any time soon – if ever.

‘�e focus must therefore move from cost reduction to be�er management of compliance risk without further increasing the spend. Compliance, therefore, must be embedded as a “business as usual” activity throughout the bank, rather than being a series of reactive regulatory responses. We are, for example, starting to see compliance being used as an opportunity to gather more direct customer feedba� and using that to redesign processes to improve the customer experience,’ says Verster.

�ere will be continued disruption in the payments business with new products and players entering the market. Even if only for defensive reasons, banks need to actively seek alliances and possibly forge partnerships with a new kind of third party. �is is something quite di�erent from the traditional outsourcers banks have become used to dealing with.

‘Banks should identify links with mobile network operators, innovators and te�nology companies. Ea� bank providing its own unique solution is not feasible. We should not forget the

te�nological impact of trying to meet this particular �allenge – existing systems in use simply do not easily support the kind of front o�ce digital solutions bank’s customers are going to be increasingly demanding of them.’

Banks should also begin e�ectively leveraging alliances and intelligently rationalising te�nology and therefore the costs associated with it. ‘�e objective should be on progressively building the bank of the future, while maintaining a viable bank for today. �e institutional response to these issues requires new thinking and innovation. �is is simply not the time for banks to be re-visiting old strategies that they have turned to in previous economic downturns,’ Verster warns.

�e market appears to reward and put a market premium on innovation. ‘We recently saw one of South Africa’s banks being voted the world’s most innovative bank. Te�nology and data will play an increasingly pivotal role in maintaining a competitive edge. South African bank bran�es are increasingly looking like havens for the modern, te�-savvy consumer. If data is in fact the ‘new oil’, banks sit on a well of information that can enable them to drive innovation and not only keep up with �ange, but lead it.’

As stated in the Outlook by the Deloi�e global banking and securities leader, Jim Rei�ba�, who was recently in South Africa: ‘I think banks have to decide, is this trend cyclical or is it structural? If they think that it is structural based on their unique business mix, then they must act like it. Do something, be more dramatic.’ Professional Services Firm, Deloi�e. ■

THE BOTTOM LINEKEY POINTS FROM THE SURVEYMaking hard decisions about where to compete, Banks should consider the strategic repositioning of their organisations. It’s one thing to say that focus has returned, and that leadership has charted a new path to growth. But without complete execution of restructuring initiatives, these efforts may result in nothing more than window-dressing.

BUILDING THE DATA-CENTRIC ORGANISATION The financial services industry is becoming a technology business, whether leaders care to admit it or not. As such, the effective and creative utilisation of the massive amounts of data that banks have, could become a characteristic of future winners and losers in the industry.

EARNING BACK THE TRUST Banking executives should deal with the current reality that their product set is commoditised, and most of the low-hanging fruit related to cost containment has been captured. As such, bank leaders should focus on driving differentiation – and excellence – in servicing clients in 2013. This will not only support bankers’ need to comply with consumer protection regulations, but also can help retain and grow their customer base on a zero-sum market.

INVESTING IN IMPROVED OPERATIONS AT REDUCED COST Irate customers, aggressive regulators, and the realities of

their own bottom line could likely drive bank executives to re-energise efforts around performance improvement. Investments will be required to meet compliance mandates, repair damaged reputations, and intelligently restructure.

SECURING THE FOUNDATION TO MOVE FORWARD Bank leadership should take appropriate steps to embed and operationalise a more risk-intelligent culture throughout their organisations. ‘In light of everything that’s happened, most organisations now, at least culturally, understand that risk management is not solely the responsibility of the risk management function, it is a bank-wide responsibility,’ says Scott Baret, partner at Deloitte & Touche LLP.

DEALING WITH DISRUPTORS IN THE PAYMENTS BUSINESS Mobile payments have the potential to disrupt the traditional triumvirate of card issuers, payment networks, and merchant acquirers that has long been dominated by the banks. This should increase the need for banks to forge partnerships with a new kind of third party, quite different from the traditional outsourcers with whom they have become used to dealing.

CREATING THE DIGITAL BANK Bankers should think about how to intelligently rationalise their technology costs so that they can build the bank of the future while maintaining an efficient bank of the present.

Risk Director – Africa – Banking:200 000 USD per annum, negotiableMaster’s Degree / PhD Risk or Finance10 Years Risk (Market, Credit, Investment and Liquidity), ALM,Financial Policies Submit CV for a confidential discussion:[email protected]

Managing Director roles:1. Microfinance Company in Ghana2. Microfinance Company in DRC120 – 200 000 USD per annum, negotiableDRC-based candidate must speak FrenchBoth roles expat [email protected] / [email protected]

Executive, Management and Scarce Skills Recruitment across all African Countries.

Contact: Hugo Lambrecht on+27 (0) 21 659 [email protected]

Visit our website to view our current89 executive opportunities in Africawww.ca-finance.com

“We find trustworthy and exceptional executives to lead our clients’ organisations in Africa.”

Transactional Banking Head:Opportunities available in Lesotho, Mozambique, Angola, BotswanaSubmit CV for a confidential discussion:[email protected]

CFO Nigeria:120 000 USD per annum, negotiableMust be CA (SA)Must have Insurance sector experienceExpat vacancy Submit CV for a confidential discussion:[email protected]

CEO Mozambique: Financial ServicesMozambican National fluent in Portuguese15 years experienceSubmit CV for a confidential discussion:[email protected]

CFO – Kenya – Insurance:120 000 USD per annum, negotiable ACCA QualifiedKenyan NationalSubmit CV for a confidential discussion: [email protected]

Executive Recruitment in Africa

CA Global has placed over 600 executives and specialist skills in Africa.

AFRICA OPPORTUNITIES

600 placements in Africa

48 Specialist Headhunters

Language Support inFrench, PortugueseChinese and English

Web: www.ca-finance.comTel: +27 (0) 21 659 9200

10929 AOP SA Banker.indd 1 2012/11/29 1:22 PM

The sophistication and style

of Lewies Attorneys is

matched only by our fierce

commitment and relentless

pursuit of winning results.

Our contract, commercial law, and general litigation services are executed with an elegance that reflects our philosophy of quality partnering.

For legal services at a higher level, step into our world, contact Lewies Attorneys on+27 21 419 1919.

www.lewies.co.za [email protected]

ww

w.p

ow

ero

f9.c

o.z

a

MEMBER BANKS


For further information contact Bank of China, Johannesburg branch on 011 520 9600 or visit www.boc.co.za

Q & AName of bank: Bank of China Limited Johannesburg Bran (BOCJHB)Owner: BOCJHB is a bran of Bank of China LimitedCore business: Bank of China mainly operates the commercial banking business including corporate banking, personal banking and �nancial market business. It also conducts businesses su as investment banking, insurance services, fund management services, direct investment and investment management, and aircra� leasing via its subsidiary, subordinate and associate companies.

In South Africa, Bank of China Johan-nesburg Bran can provide business services in all categories whi com-mercial banks o�er, including corporate banking, personal banking and �nancial market services. Target market: With commercial bank-ing business as the core and founda-tion of Bank of China’s development, the client base of BOCJHB consists of customers from industries su as min-ing, �nancial institutions, importing and exporting, media, manufacturing, property development, infrastructure, energy, and so forth. �rough providing �nancial and credit services with good competitiveness to clients from local enterprises, Chinese “going global” enterprises, �nancial institutions and overseas Chinese people, Johannesburg Bran has been playing a vigorous and proactive role in the economic develop-ment and �nancial exanges between China and African countries.Core values or di�erentiators: Established in 1912, Bank of China has upheld the spirit of “pursuing excellence” throughout its century-long history. By enhancing the values of integrity, performance, responsibility, innovation and harmony, the Bank has built up an excellent brand image whi is widely recognised within the industry and by its customers.

Since its establishment in 2000, Bank of China Johannesburg

Introducing Banking Association Member

THE CEO: ZHIKUN QIUPrior to his current role, Mr Qiu served as Deputy General Manager in Overseas Institution Management Department of Bank of China Head Office, Beijing, China.

Branch, as the first bank from mainland China in South Africa, has consistently dedicated itself to enhancing the influence of BOC in Africa. Based in South Africa with business expansion to more than 20 African countries, BOCJHB has witnessed and participated into the rapid development of the economic and trade exchanges between China and South Africa, as well as China and other African countries. It is continuously providing financial services of high quality and efficiency to clients, and also making significant contribution to the South African local social and economic development.

Any newsworthy anges in the bank’s structure or business in the near future: BOCJHB was authorised by Bank of China to act as

regional headquarter in sub-Saharan Africa, whi covers the Bank’s existing a�liated institutions in South Africa, Zambia, Kenya, Angola, Ghana and Uganda. Other institutions in countries su as Nigeria, Cameron and Mauritius. BOC Durban Bran will come into operation in the near future. Is there a key product or initiative you wish to highlight? Due to the continuous economic growth of China, the huge scale of interna-tional trade and the relative stability of Ren-minbi* (RMB, the o�cial currency of People’s Republic of China) value, RMB is increasing-ly accepted across the world, o�ering a new oice for national governments and enter-prises in risk mitigation. Bank of China seizes the historic opportunity to vigorously promote its cross-border RMB business and ranked �rst in the market in terms of cross-border RMB se¡lement volume and number of accounts opened.

Bank of China Johannesburg Bran is the leader in providing RMB services in South Africa and other African countries.

RMB services consist of all �nancial products and services of a commercial bank.International links: As the most internationalised and diversi�ed bank in China, Bank of China provides full range of �nancial ser-vices in China’s mainland, Hong Kong, Macau, Taiwan and other 36 countries. �e Bank leverages its overall advantages to improve its global service capabilities for customers and accelerates the deploy-ment of its overseas networks by establishing outlets, representative o�ces and “China Desks” and so forth, to extend the overseas net-works and enhance its global service capability. ■

Bank of China

Zhikun Qiu, CEO, Bank of China

swipe me if you like mefree copy march 2013

talks man-to-man with a rugby legend

and layers on the lipstick for a

Jinger ninja

PLUS Guides to CT, Jozi, Durbs and Garden Route • Flights of fantasy

BEAUTY RAMAPELEPELE/

BEN VOSS

got themunchies?FOR THE MENUsee back page

Ben and Beauty interviewBob Skinstad

Would Bob take on the monster players of today?

Ard MatthewsHow did Ard survive

growing up on The Bluff?

Split personality

For further information contact Finbond Mutual Bank on

012 460 7288 or visit www.finbondmutualbank.co.za

MEMBER BANKS


Q & AName of bank: Finbond Mutual BankWho owns the bank: �e fundamental “Mutual Bank” principle is that a “Mutual Bank” is owned by its depositors and managed for the bene�t of its depositors. Finbond Group Limited (FGL) whi� was Finbond Mutual Bank’s �rst depositor, capitalising the bank with the required regulatory capital through the acquisition of permanent Class A shares, is Finbond Mutual Bank’s majority shareholder. Core business and target market: Finbond Mutual Bank conducts its business through two divisions focused on, Investment and Savings Products and Micro Credit Products. Investment and Savings products, whi� o�er an above-average rate of return, are o�ered nationally to investors and pensioners looking for guaranteed, higher �xed-income in the current environment of depressed yields. Finbond’s strategy is to stimulate savings through o�ering superior investment and saving solutions by providing client shareholders with be�er interest rates, be�er products and be�er service. Micro Credit Products are o�ered nationally through Finbond’s 170 bran�es in South Africa to the underbanked and underserved market of more than 40% of the adult population in South Africa actively seeking credit solutions but remaining largely una�ended and underserviced. Vision: To be the leading Mutual and Savings Bank in South Africa, improving the quality of life of our clients through their participation in saving together, growing together and ownership of their own community bank.Core values: Finbond Mutual Bank exists to improve and transform the lives and livelihoods of our clients by availing them of modern, inclusive banking products and services that bene�t and empower them. �ese are:• Integrity – To maintain social and ethical norms in all activities. • Human Dignity – To at all times treat people with respect

and consideration for their unique needs, feelings and opinions. • Excellence – To be excellent in everything at all levels,

at all times. • Accountability – To accept responsibility for the work delegated

and execute it with excellence. • Teamwork – To strive for the greater bene�t of the organisation

through an appreciation of the role that ea� employee plays in a�ieving the overall goals.

Introducing Banking Association Member

THE CEO: DR WILLIE VAN AARDTPreviously the co-founder and an executive director of Thuthukani Group Limited, a JSE listed micro-finance and debt collection company, van Aardt has held the positions of Legal Consultant to Sanlam and Executive Director of Thuthukani Group Limited. Van Aardt obtained a B. Proc (Cum Laude), LLM at the University of Pretoria (UP), LLD at Potchefstroom University for Christian Higher Education (PUCHE) and has 15 years experience in financial services and micro-lending sectors.

CSI: Finbond contributes to and is proud to be associated with Tshwane Place of Safety Association (TPOSA), whi� focuses on providing orphaned and abandoned babies and babies infected with HIV with good homes, frail care and shelter. For further info see www.placeofsafety.org.za. ■

Finbond Mutual Bank

Dr Willie van Aardt, CEO, Finbond

A South African mobile enablement giant has become one of the first and biggest service providers in Africa covering over 1000 networks in more than 220 territories and countries. What was once a local South African start-up company is now growing

its business by targeting the development of Africa’s fast-growing mobile banking and financial services sector.

Clickatell has extensive reach into the African mobile communications market, which enables it to deliver financial transactions alongside its traditional messaging business. They already operate in Nigeria and Rwanda, with Kenya and Ghana to follow shortly.

They differentiate themselves by enabling banks to reach and transact with their clients securely through cost-effective channels, thus reducing the bank’s cost to serve. Simultaneously, they can also drive the bank’s cost to serve down further by building additional revenue streams into their offerings, such as the convenience of selling prepaid airtime and other value-added services.

Clickatell sees the mobile market as the number one area for growth in the banking and retail sectors, especially in Africa where not everyone has access to a computer or to a local bank branch.

The growth of mobile networks across Africa has been exponential. A recent study showed that by 2015 more people in Africa will have access to a mobile network than will have electricity in their homes. An independent study by ABI Research expects mobile phone subscriber penetration levels to pass 80% in the first quarter of 2013, up from 76.4% or 821 million subscribers in the last quarter of 2012.

‘Clickatell is primarily a mobile enablement company. It helps businesses connect, interact and transact with their customers on mobile devices. We can deliver our services reliably, efficiently and over a wide geographic footprint. That’s our competitive advantage,’ says Pieter De Villiers CEO and founder of Clickatell.

Clickatell is already in partnership with several banking and financial

SOUTH AFRICAN MOBILE ENABLEMENT GIANT TARGETS AFRICAN CELLPHONE BANKING AND TRANSACTIONAL SERVICES BUSINESS

institutions where they deliver their preferred mobile solution. They work with these banks to address their channel cost to serve needs, while functioning as a preferred mobile enabler. The company has direct access to all the major mobile networks in South Africa and the majority of networks across the continent.

Clickatell’s approach is unique in that their channels do not replace each other but rather complement each other. In one case study, which demonstrates their ability, they can deliver 98.9% of their transaction services and messages in less than a second.

Pieter can be proud of what the company has achieved since he co-founded it in South Africa with three others, including his brother Casper, in 2000. Initially they wanted to start their own dot-com business to inform customers by SMS about last-minute discounted airfare deals. In their search for a mechanism that would enable them to do this they spotted a gap in the market. Clickatell was launched to provide an interface between the internet and telecommunications services.

With an initial startup capital of R180 000 in Cape Town, they grew via acquisition and venture capital backing from Sequoia Capital (one of the early investors in Apple and Google amongst others) to become an international mobile enablement company, head quartered in Redwood City, California.

Clickatell has high hopes for its push into Africa, where it already generates about half its revenues. It hopes to increase revenues beyond $100 million in the next three years and is ramping up its mobile enablement services to be the driving force behind this.

‘We are very excited about the prospects for growth in Africa,’ says Pieter. ‘The African continent presents a wonderful opportunity and we are happy that we can be a part of this continents progress.’

For more information:Please visit www.clickatell.com or contact Clickatell Enterprise on +27 21 910 7700 or alternatively via email at [email protected]

TECHNOLOGY


Gadgets Changing times require faster and more reliable gadgets for exceptional results.

ANDROID LEADERHTC OneRtbahtc.co.zaHTC has finally revealed its flagship model for 2013, the HTC One. It’s a real musclephone, with a 4.7inch/12cm 1080p display and 1.7GHz quad-core Snapdragon 600 processor with 2GB of RAM growling under its bonnet. At only 143g, its aluminium unibody sits snugly in the hand.

The only disappointing spec is the primary camera’s 4 megapixels, though it’ll shoot HD video and its advanced features give it good low-light capability. HTC’s Sense Android skin has been upgraded. The immediately apparent addition is BlinkFeed, which aggregates social media, news feeds and video on the homescreen. And one more thing: the One functions as an infra-red remote for your home entertainment system.

PEDIGREE HYBRIDSony Vaio Duo 11R15 700sony.co.zaThere’s a market for convertible tablets, even if none of the twisting/flipping hybrid creatures by Acer, Lenovo and others have cracked it yet. Alas, neither has Sony. The Duo’s always-exposed touchscreen makes it a slate, which is basically a 1.3kg tablet.

As a Windows 8 notebook, its specs are good, as Vaios always are, with a choice of Core i5 or Core i7 processors, 6GB of RAM, 128GB solid-state drive and a 29.5cm, Full HD display. But because the raised screen covers about a third of the base, the Duo’s keys are small and there’s no trackpad. We also found it inconvenient to have only one screen position. All in all, if you’re looking for flexibility, you may find the Duo 11 frustrating.

By Charles Boffard

THE NEW BLACKBlackBerry Z10 R7 000blackberry.co.zaBlackberry loyalists can breathe a sigh of relief. The Z10 looks like it means business; slightly bigger than an iPhone, with a 10.7cm screen and no physical buttons on its face. And no keyboard, either. Blackberry have committed to an excellent virtual keyboard with the best predictive text we’ve ever seen. You’ll be typing only one or two letters of most words. The gesture-based BB10 (currently with over 70 000 apps) matches up to the competition pretty well, and it’s a relief to gesture your way from calendar to contacts to browser without having to go via a home screen. Blackberry’s killer app, uncapped internet service, is absent (though it’ll be available for older Blackberry devices for a while). The Z10 is definitely good enough to keep loyalists within the fold.

GOD OF SMALL THINGSiPad miniFrom R3 400core.co.zaWe’d made up our minds about the iPad Mini in December [2012],

before we’d even seen one. We use our iPads for so many things that scaling down from that expansive screen to something Huawei-sized just wasn’t an option. And the specs! Its screen resolution and processor are more iPad 2 than new iPad. So forget it.

Then, one day, we actually picked one up and held it. And bought it. You’ll understand this when you hold a Mini in your own hands. It’s not a scaled-down iPad, it’s a refined

iPad. Light and sliver-thin (7.2mm), it fits so naturally into one hand that gripping a full-sized tablet afterwards feels like

carrying a suitcase. The screen is just big enough for reading, working and media; and it’s so much more portable that you’ll

take it with you more often. Like its big brother, it’s available with 16/32/64GB storage, Wi-Fi only and Wi-Fi/3G.


BANKING NEWS

THIS IS THE 44TH QUARTERLY survey conducted to measure confidence in the banking industry. Emilio Pera, lead financial services director at Ernst & Young comments: ‘Confidence levels remain strong, despite very weak economic prospects. Local and global uncertainty with weak growth prospects in the Euro zone, and uncertainty in the USA in the run-up to presidential elections, all contributed to very weak economic activity in South Africa in the fourth quarter of 2012. GDP growth slowed to 1.2% in the third quarter of 2012, considerably below its long-term average rate of 3.2%, and substantially down from the second quarter’s 3.4%. In such a low-growth environment, both retail and investment banks struggled to grow revenue streams. The slower growth environment resulted in weak demand from the corporate segment, whilst retail banks faced slower lending growth off an already weak base.’

Both interest and fee income growth slowed in the last quarter of 2012 for retail banks. For investment banks, income growth rose somewhat, despite weaker business volumes. ‘Corporate demand for investment banking services remains weak, as evidenced by weaker activity across the core investment banking business lines,’ Pera comments. ‘This resulted in shrinking fee income, and in addition to this, investment income also shrank for the third consecutive quarter. As a result, overall earnings shrunk for investment banks in the fourth quarter. Nevertheless they remain confident about their prospects.’

Bank confidence strong despite economy

A survey released by Ernst & Young indicates that banking con�dence remained strong through

the fourth quarter of 2012, with con�dence particularly robust in the retail segment.

OTHER SURVEY FINDINGSRetail banks sharply increased tightening of credit, in line with an uptake in credit impairments. The credit policy tightening was confined to the household segment, while business banking credit standards remained unchanged.

Both retail and investment banks reported a net decline in employee numbers. In the case of retail banks, this was the first time since third quarter of 2011 that banks reduced overall numbers. Cost growth remained strong albeit softer for retail banks than in the previous quarter, while investment banks faced much more modest cost increases.

Pera further remarks on the credit tightening, ‘Investment banks have had a relatively benign credit impairment environment for a while, and this continued into the fourth quarter. Retail banks, on the other hand, have had less than two years of improving credit losses, and are again facing a deteriorating credit quality scenario. We think this is at least partially linked to concerns regarding recent rapid growth in the unsecured lending market. In addition, the mortgage market has not fully recovered, and banks remain cautious following the losses they recently incurred in this segment. Given these issues, banks are understandably cautious about the terms and conditions under which they are willing to approve advances.

‘The banks expect the new year to remain tough, with revenue growth anticipated to slow even more than it did in the fourth quarter in both retail and investment banking.’

South African News


FOLLOWING ITS DOWNGRADE of South Africa’s sovereign rating, Fitch Ratings downgraded the viability ratings of South Africa’s major banks in January. Absa, FirstRand, Investec, Nedbank, Standard Bank and their respective rated holding companies had their ratings reduced by one notch.

‘The sovereign rating is now effectively acting as a cap on these banks’ viability ratings,’ Fitch stated.

FirstRand, Nedbank and Standard Bank had their viability ratings and long-term issuer default ratings downgraded from BBB+ to BBB, while Investec’s issuer default rating and viability rating were both downgraded from BBB to BBB-.

Fitch said that the downgrade reflected the banks’ concentration in South Africa, a high proportion of liquid assets invested in government securities, and a weakening operating environment.

In December, Moody’s credit rating agency lowered its outlook for South African banks ‘from “stable” to negative’, citing their overexposure to government debt, a deteriorating economic outlook and liquidity challenges. Moody’s described the operating environment for South Africa’s banks as “challenging”.

STANDARD BANK HAS PARTNERED with global business management software leader SAP to launch a platform that will enable users of low-end mobile phones in South Africa to open accounts using their devices.

The AccessAccount platform aims to allow the unbanked to easily open accounts and monitor their balances. ‘This innovative banking project is radically affecting the lives of thousands people for the better,’ said Pfungwa Serima, CEO of SAP Africa. ‘We look forward to seeing the continued success of the implementation across the continent.’ Mobile banking agents will sign up users through a portable device that takes ‘only a few minutes’ to open accounts. Customers can then perform person-to-person transfers, purchase prepaid electricity and airtime through their phones and deposit and withdraw money from informal traders signed up with Standard Bank. ‘We have built an entirely new IT system and platform that spans across all the bank’s offerings in our “Inclusive Banking” business,’ said Peter Wharton Hood, deputy chief executive of Standard Bank Group. Standard Bank is one of the first banks in the world to run SAP Mobile Platform. The bank is currently opening up to 7000 new accounts a day via SMS technology, in less than six minutes per transaction. Over 14 million South Africans are without access to bank accounts, creating a significant target market for the new AccessAccount product.

New mobile banking platform for low-end phones

Fitch downgrades SA banks

5TH ANNUAL

RETAIL BANKING AFRICA 2013

"An investment in knowledge pays

the best interest." - Benjamin Franklin

For more information contact MOHOR MUKHERJEEE: [email protected] | T: +971 4609 1570 | F: +971 4609 1589

INVEST TODAY TO REAP THE BENEFITS OF KNOWLEDGE TOMORROW

REGIONAL MEDIA PARTNERS

AfricaBusiness.com

BUSINESS MEDIA PARTNERS

FINANCIAL MEDIA PARTNERPRIME MEDIA PARTNER

GOLD SPONSOR: SUPPORTING ASSOCIATION:OFFICIAL AIRLINE PARTNER

OFFICIAL CITY GUIDE

REGISTER NOW!

25th & 26th June 2013 | Post Conference Workshop on 27th June 2013 | Johannesburg – South Africa

PRIME MEDIA PARTNER


BANKING NEWS INTERNATIONAL

Chancellor Angela Merkel’s coalition government has drafted new banking regulations intended to isolate excessive risk-taking by banks, protect customer deposits and limit the spread of �nancial trouble within the banking system.

The regulations also propose stiffer penalties, including fines and prison sentences of up to five years, for executives engaging in reckless investment.

Banks running high-risk trading operations valued at either 20% of their balance sheets or €100 billion ($135 billion) will be required to transfer those assets into legally and financially separate units. The aim is to shield customer deposits from the banks’ riskier trading activities. Banks would also be required to submit their own plans for restructuring and liquidation in case of financial trouble.

The regulations will have to be approved by the German legislature. Deutsche Welle reports that parliamentary leaders said they will reject the egulations ‘because they don’t go far enough to curb systemic risk in the banking sector’.

BRITAIN’S “ELECTRIFIED FENCE”Britain’s new Banking Reform Bill will “ring fence” the High Street activities of UK banks, requiring separate subsidiaries for their dealing floors in the City.

Investment and High Street banks will also have different chief executives, and the ring fence is to be “electrified” – regulators will be empowered to split up a bank, subject to conditions, if the regulator deems it to be undermining the purpose of the ring-fence. Regulators will also review the entire UK banking industry each year to determine whether the ring-fence is proving effective.

UK and Germany:tougher banking rules

‘2013 is the year we reset our banking system, so the banks work for their customers – and not the other way round,’ Chancellor of the Exchequer George Osborne told bankers in a speech at JP Morgan in February. ‘No more rewards for failure. No more too big to fail.’

From April, the UK’s Financial Services Authority is to be abolished and the Bank of England will be in charge of keeping the UK’s financial system safe. ‘The Bank of England will be the super cop of our financial system,’ Osborne said.

The new measures have received mixed reactions from the financial sector.

‘It’s important that individual banks are in control of their own destiny on the question of structure,’ the Chamber of British Industry commented.

PwC UK’s Kevin Burrowes described the electrified retail ring-fence as “curious”. ‘The regulators have more than enough weaponry available to make banks comply regardless,’ he says. ‘Electrifying the fence will be time consuming as the Chancellor makes the ultimate decision on whether to flick the switch and force separation. The Chancellor is sending a strong signal to banks and the markets that he expects them to take this matter very seriously and not abuse the system on ring- fencing. Few could argue that sending this message is not necessary given the sector’s current reputation.’ By Deutsche Welle

Capco, a global business and technology consultancy dedicated solely to the financial

services industry. We work in this sector only. We recognize and understand the opportunities

and the challenges our clients face. We apply focus, insight and determination to consulting,

technology and transformation. We overcome complexity. We remove obstacles. We help our

clients realize their potential for increasing success.

The value we create, the insights we contribute and the skills of our people mean we are more

than consultants. We are a true participant in the industry. Together with our clients we are

forming the future of finance. We serve our clients from offices in leading financial centers across

North America, Europe, Africa and Asia.

Capco Johannesburg 23 Wellington Road, Parktown, 2193, South Africa+27 (11) 486 9541 CAPCO.COM [email protected]


BANKING NEWS INTERNATIONAL

NAIROBIThe amount of money transacted by Kenyans using their mobile phones grew by over 50% to hit Sh1.4 trillion (US$16.027 million) in the financial year ended 30 June, 2012, Kenyan Central Bank data shows. The rapid growth of the mobile phone money transfer service usage from the Sh919 billion mark in 2011 was helped by a 39.51% growth in the number of transactions. The number of transactions increased from 364.06 million in a year (30 June, 2011) to 507.90 million transactions (30 June, 2012).

In the period, the customer base of persons using services such as M-pesa, Airtel Money, Orange Money and Yu Money increased by 10.06% from 17.99 million customers to 19.8 million customers. The number of agents increased by 31.61% from 46 588 to 61 313 in the same period, with M-Pesa accounting for 76.42%, Zap 19% and Yu 2.8%. These statistics are contained in the Central Bank of Kenya 2012 annual report.

The number and value of transactions are expected to go up this year based on the growth of number of mobile phone users. According to the Communication Commission of Kenya (CCK), between June and September 2012, the total number of mobile subscriptions was recorded as 30.4 million up from 29.7 million posted in the previous quarter. This represents an increase of 2.5% during the period and 15.0% when compared to the same period of the previous year. ‘The continued growth in mobile subscriptions indicates that there is still opportunity for growth in the mobile telephony services,’ says the CCK in a different survey. However, the rate of growth in the subscriber base is flattening as the sector progressively tends towards maturity, CCK notes.

‘The use of mobile money transfer service has continued to transform the way of doing business and enhanced financial inclusion, particularly for the unbanked,’ Kenya’s communication sector regulator notes. ‘This growth indicates that the mobile money transfer service has become a key payments and transaction tool, mainly due to its easy use of applications, convenience and low cost value propositions.’ I-Net Bridge

Kenya mobile money transactions grow by over

50%

OverviewXantium offers a complete service relating to the manufacturing and personalisation of cards. Our products and services range from consulting to the complete management of any one of the following aspects:

• Card design & manufacturing• Personalisation• Stationery/packaging design and sourcing• Pin mailer printing• Card distribution and reporting

Detailed production information for all cards is provided in real time through Xantium’s web-based Track & Trace system [see Track & Trace]. This system is secured and accessible only by authorised employees. All reports generated on this system are PCI –DSS compliant.

Chip & EMVA chip card is a credit or debit banking card that has a microchip embedded in it.The chip provides enhanced security and greater convenience to banks and cardholders. In order to enhance their service and security offerings, many fi nancial institutions, in line with Visa and MasterCard requirements, are opting to issue chip cards. Xantium with its products, technical support and services, can assist companies to move towards utilising and installing this new technology. Xantium is also able to carry out large-scale EMV conversions and implementations as well as daily ongoing card renewal and replacement services.

TelecommunicationsXantium offers secure data fi le processing, production, full packaging and fulfi lment.

Complete Card Solutions Provider

ContactsFor any card related product enquiries please contactXantium Integrated Solutions.Tel: +27 (0) 11 472 9330 orE-mail: [email protected]

www.xantiumis.co.za

Our clients are assured of accurate, affordable SIM cards that are timeously delivered. Xantium provides GSM, CDMA and UMTS product lines in telecommunications.

Track & TraceXantium has developed a Track and Trace system that is used not only as an internal personalisation production management tool, but also gives customers the level of comfort that the card personalisation will be completed in the required time frame. Xantium has developed a web-based front-end to the Track and Trace system to allow clients to track the progress of their orders through the personalisation bureau, giving them complete transparency. One benefi t of this is for feedback for call centres, allowing for accurate information in real time, making it possible for the call centre agent to identify where in the system a card is, and to manage customers’expectations on the fi rst call. Some of Xantium’s larger customers have Card Operation Departments which are responsible for the on time delivery of over half a million personalised cards per month. The Track and Trace system has proven to be an effective tool in the management of the supply chain, from cards being ordered through to dispatch. Stock management is also available through the system and allows clients to monitor and re-order stock timeously.

Black Economic EmpowermentXantium Integrated Solutions has a Level 5 - Broad Based Black Economic Empowerment (B.B.B.E.E.) scorecard. Our Black owned Equity Company comprises several industry stalwarts who bring a wealth of experience and relationships to our collaboration.

55

LIFESTYLE

Edition 5 BANKER SA

WHERE WERE YOU BORN?I was born in the province of Kerala in India, in 1956. Kerala is known worldwide as God’s own country because it is very beautiful. It is where St �omas, the disciple of Jesus Christ, came and started Christianity in India. HOW DID YOU BECOME A BANKER?I did a Ba elor of Commerce and Masters of Commerce at the University of Kerala, India. As a student I wanted to do an internship at the State Bank of India as it paid be�er. [�e] State Bank of India is the largest bank in India and a job in the bank is highly respected. Before I joined the bank I wrote an examination as part of the recruitment process, and I quali�ed. On average one in 100 000 are selected for the programme. I was appointed in 1979 as an executive trainee and I did a two-year training programme in various areas of the bank.

Meet the bankers

Dr Mathai Vaidyan, a banker since 1979, is General Manager of the State Bank of India, the largest bank in the South Asian country,

with 23 000 branches and 232 000 employees. He also serves as Regional Head for Africa and CEO of the bank’s operations in South Africa.

In his banking career, Dr Vaidyan helped establish the State Bank of India’s life insurance division, SBI Life Insurance and SBI Gilts, a primary dealer in government bonds. In the early 1980s he was posted to Los Angeles as Credit Of�cer of the bank. In his time in the US he managed to complete a Doctorate in Business Administration by the age of 30.

WHAT’S YOUR HIGHEST ACADEMIC QUALIFICATION?I completed a Doctorate in Business Administration at the age of 30 in the United States. WHAT HAS BEEN YOUR BEST MEMORABLE MOMENT AND ACHIEVEMENT IN BANKING?I was the �rst in India to bank those who could not read and write. In 2006, I laun ed the biometric identi�cation to bank customers who could not read and write. I moved to South Africa four years ago, and I have managed to expand the bank’s operations to a retail bank with online banking, debit cards, ATMs and a full bouquet of products for wholesale and retail. WHAT IS YOUR BEST HOLIDAY DESTINATION?I just like to travel. I don’t have a favourite place. I like going to the mountains and the ocean. WHAT DO YOU THINK DIFFERENTIATES INDIAN AND SOUTH AFRICAN BANKS?In India, about 40% of loans are given to priority sectors like agriculture and small businesses, whi create employment. �is means that banks really support the creation of employment and rural development. In South Africa I don’t think it’s like that.

WHAT ADVICE WOULD YOU GIVE TO ASPIRING BANKERS?It’s a very exciting career and there are opportunities for tremendous exposure in various �elds. WHAT ARE YOU READING?I read books on management, leadership and autobiographies. Right now I am reading Conversation with Myself by Nelson Mandela. I have just completed reading �e State of Africa by Martin Meredith. WHO INSPIRES YOU?One of the people [who inspire me] is a person whom India inherited from South Africa – Mahatma Ghandi. He came to India and said, ‘If India is to grow, we need to grow rural India.’ I also like Jawaharlal Nehru – he helped build up many educational institutions in India. He was a visionary. In Conversations with Myself, Mandela mentions Nehru as his hero.

WHAT OTHER ACTIVITIES DO YOU ENJOY?I do a lot of yoga and meditation. I believe that yoga is mu more useful for the development of the physique as well as the mind. At college I used to play soccer, but now, once in a while, I play golf. ■

I believe that yoga is mu more useful for the development of the physique as well as the mind.

CASH HANDLING – NEW WAYS OF WORKINGCash in circulation is ever growing and the trend looks set to continue. Handling cash still costs money. The costs associated with cash are linked to robbery risks, time involved in managing cash, shrinkage losses, manual preparation and reconciliation and information.

Reducing these costs, optimising cash operations along the whole length of the cash chain – from the store all the way up to head offi ce – as well as streamlining the processes for retailers, banks and CIT (cash-in-transit) involved in the cash cycle, all call for a whole new approach to cash handling.

The Gunnebo product portfolio offers a combination of hardware, software and global services, ranging from entry-level systems to complete closed cash-handling solutions – from cash deposit to front-offi ce security and back-offi ce automation.

For further information, contact Gail Carew on 011 878 2300 or email [email protected] or visit www.gunnebo.com.

VCS INTRODUCES IMPROVED SYSTEMSVirtual Card Services was established in 1996 to offer a solution to the mail order market that found conventional methods of securing large volumes of credit card payments cumbersome and costly.

With more than 50 years’ collective experience in developing and implementing credit, debit and smart card processing systems for a major card issuer in South Africa, VCS was quick to identify the niche presented in providing a solution that exactly meets these needs.

The “Virtual Vendor” system, which was developed out of this need, interacts with a bank’s existing legacy systems, while meeting the vendor’s demand for an automated, electronic transaction system.

The company’s client list today boasts a cross-section of businesses that have realised the benefi ts of automating their credit card transactions.

For further information, visit www.vcs.co.za.


PRODUCT NEWSAUCTION OPERATION – SA`S TOP VEHICLE AUCTIONEERS Auction Operation is a national auction company recognised countrywide as the leader in the auction sale of motor vehicles, whether repossessed, end-of-term fl eet vehicles or insurance salvage.

Auction Operation understands that a successful auction is a result of a carefully planned event with well-executed marketing and preparation.

The company prides itself in offering the fi nest auctioning services available today. The fi rm is fully staffed with 17 auction facilities countrywide, with a house call centre and a fl eet of 50 rollbacks and car carriers for the transportation of vehicles countrywide, combined with the experience necessary to professionally conduct auctions.

For further information on upcoming vehicles sales, contact Auction Operation on 0861114665 or visit www.auctionoperation.co.za to see the different brands and models of cars put up for auction.

SENTINEL BRINGS YOU INNOVATIVE AND TAILOR-MADE SECURITY SERVICESWith a track record of 30 years in security paper, Sappi has an in-depth understanding of the need for security paper solutions which guard against fraud, forgery, counterfeiting and other security risks. Sappi offers innovative, customisable security solutions suited to litho, web, laser and intaglio printing. With the wide range of overt, covert and forensic security features, which are embedded in the paper during the manufacturing process, counterfeiting becomes more diffi cult. Sentinel security paper is suitable for a myriad of applications such as passports, ballots, cheques, traveller’s cheques, security labels, vouchers and many more. Sappi’s manufacturing processes comply with and often exceed a number of international accreditations including Cheque and MiCR Standards Authority of South Africa and Clearing Bank Standard 1 and 2. Sappi’s strategic partnership offers a fl exible, end-to-end solution, tailor-made to your specifi cations, providing customers with consistent quality backed by international accreditations.

aaaaa.

At Ernst and Young,we’ll give you opportunities towork for the world’s leadingbusinesses in an environmentthat we know you’ll findchallenging and stimulating.Welcome to the world of seeingmore. To find out more, go toey.com/careers

See More | Opportunities

We know in today’s world, you face unprecedented challenges and responsibilities. According to our latest Global Consumer Banking survey, customers are switching banks, changing their behaviour and demanding improvements. At Ernst & Young, we help banks respond to this by assisting them with reconfiguring their business models around customer needs. Find out how our financial services teams can help you find a resolution at www.ey.com/za.

See More | Vision

The financial services landscape.

We can help you navigate it.

© 2

012

EYG

M L

imite

d. A

ll R

ight

s Re

serv

ed.

Documents

Banker S.A. Edition 5