Africa-Press – South-Africa. Absa has announced a new broad-based black economic empowerment (B-BBEE) scheme worth R11.2 billion that will increase its black ownership by about 7 percentage points.
Its last empowerment report showed black share ownership stood at 17.56% in 2021, with the bank saying that after the transaction, its black ownership will exceed the 25% threshold set out in the Financial Sector Charter.
The bank hopes to implement the deal before the end of this year, with shareholders set to vote on the matter on 2 June.
A Corporate Social Investment (CSI) trust, for the benefit of black communities, will indirectly own a 4% shareholding, while a staff trust will indirectly hold 3% of Absa.
Black staff members in South Africa will receive just over 82% of the value of the staff trust, it said, while the equivalent of approximately 1% of Absa will be made available to staff employed by subsidiaries in other markets.
The CSI trust will focus on education and youth employability, and the beneficiaries will be reviewed annually. The trust will receive an annual dividend equal to 25% of the dividend per share paid by Absa, with staff receiving the same. All employees are eligible, though black staff members will receive an additional 20% allocation, and the shares will vest after five years.
“The transaction was specifically designed to align with our intent of being an active force for good, firmly demonstrating our commitment to broad-based black economic empowerment as we build a diverse and inclusive organisation not only in South Africa but also more broadly across our business,” said Absa CEO Arrie Rautenbach in a statement.
Apart from the ownership targets set out in the Financial Sector Charter, Absa also previously made commitments to its second-biggest shareholder, the Public Investment Corporation (PIC), to improve the level of transformation in the bank.
Absa also had a major exco shake-up in 2022, which saw it promote four black executives to the exco, bringing black representation at its leadership level closer to 50%.
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