FirstRand welcomes the opportunity to present its submission to Parliament on the progress the business
has made in addressing transformation and inclusivity.
Since the creation of the FirstRand group in 1998, we have recognised the imperative of creating an
economy and a society that is completely inclusive, as this will ensure a sustainable and prosperous future,
particularly for generations to come.
We believe these hearings represent an opportunity for healthy dialogue, and will demonstrate that both
FirstRand and the sector we operate within take transformation and inclusiveness extremely seriously, and
continue to make good progress. We acknowledge that there is still much more to do, but hopefully the
information contained in our submission and our presentation will address any concerns that we are not fully
committed to creating an equal and sustainable society.
We strongly believe the banking sector is a national asset for the country. It is highly regarded throughout the
world and is integral to the South African economy. It has an unparalleled set of tools that have already
demonstrably been put to work for the people of this country, from credit to buy a home or fund a student
loan, to cheap and accessible channels to transact and pay bills and send money home. We have funded
large corporates and SMEs to facilitate the creation of jobs and build capacity and we have put our balance
sheets to work to create transformational infrastructure in line with the objectives of the National
Development Plan.
Of course our stakeholders have also benefited from these initiatives, but a commercially sound and
profitable banking system is a non-negotiable. Examples from around the world have demonstrated the
devastation that results from banking crises: job losses, recession and social unrest.
There can be no trade-off between maintaining a sound banking system and driving transformation and
inclusivity, they are fundamentally complimentary objectives and the latter will never become a reality if the
economy falters.
We look forward to a substantive and constructive debate and thank you for this opportunity.
Page 1 of 1
FirstRands submission on progress on transformation
Johan Burger (CEO: FirstRand)
March 2017
2
Customers TRUST US To
Prudential and keep their money safe and Governance over lending
fiduciary regulations accessible 24/7 (internal and NCA)
ENSURES
SUSTAINABILITY
Rank
Country
SOUTH AFRICA out of 144 world financial systems
Singapore 2
DEVELOPED, New Zealand 3
SOPHISTICATED Malaysia
Finland
4
Canada 8
consistently ranked in
United States 9
the TOP 10 in the world
Norway 10
Source: World Economic Forum Competitiveness Report, 2015
4
Transformation
Inclusivity
Banks are very IMPORTANT TOOLS in delivering transformation and inclusivity
5
ENTERPRISE
MANAGEMENT EMPLOYMENT
OWNERSHIP AND SUPPLIER
AND CONTROL EQUITY
DEVELOPMENT
EMPOWERMENT SOCIAL
CSI
FUNDING DEVELOPMENT
26% staff
schemes
broad based 63% 11%
community strategic
schemes partners
COMMUNITIES
STAFF
STRATEGIC PARTNERS
Staff 2%
Other
7% 21% local
PIC institutions
9% (large pension
funds, etc.)
BEE*
5%
22% foreign
institutions
RMH**
34%
Calculated on FSC guidelines and methodology. Includes BEE partners, FirstRand Empowerment Trust, FirstRand Staff Assistance Trust and look-through from Royal Bafokeng Holdings.
White 24%
White 49% ACI 51% (9 120)
(12 495) (13 005)
ACI 76%
(28 800)
White
18%
White
39% ACI
ACI 59%
81%
ACI ACI
35% 34%
White White
63% 63%
ACI
7%
ACI
26%
87%
of FirstRands total
White
White graduate intake is
74%
93%
black
13
1998 2017
ACI male
13%
ACI female
26%
Since 2012 FNB has committed WesBank has invested R3.5 billion in
financing the SA taxi industry over the last 3 years
R10 billion to
MAINSTREAM MARKET HOUSING
FNB and WesBank provide
WesBank has empowered 633 UBER R33 billion SME funding:
DRIVERS with investment of R110 million
black SMEs
AGRICULTURE transformation
FNBs BEE exposure R308 million
R8.3 billion
16
14 000
13 811
FirstRands cumulative
12 000
10 283
PROCUREMENT spend
10 000
from 2012 to 2016 on
8 000
-
2012 2013
Procurement from QSE & EMEs
2014
Black Owned
owned
2015 2016
Black women owned
R10 billion
17
Total
eWallet users
= 4.3 million:
74%
FREE users
26% FNB
customers
FIRSTRAND FIRSTRAND
Empowerment FOUNDATION
FOUNDATION
1% of post-tax profits
at R6 billion is one
since establishment in 1998
of the largest endowments in
SOUTH AFRICA and is
black controlled
R1.7 billion
FRF/FREF/FSAT: R460 million of available funding per annum
20
In conclusion
Empowerment financing
Consumer Education
Transformational infrastructure
2.00
1.95
2.00
2.00
B-BBEE
BAgric financing
Black SME financing
Affordable housing
12.00 12.00
contributor
BEE Transactions 3.00 3.00
CSI/socio economic development 3.00 3.00
95.95 100.00
* Verified by: SizweNtsalubaGobodo Ratings
24
Housing finance scheme Considering setting up this scheme to ensure tenure of security
for farm workers Benefitting both commercial farmer and farm workers
25
FirstRand created Vumela to help address FirstRand is the largest contributing financial
early stage business finance and mentorship services firm to the private sector-led SME
Vumelas majority beneficiary is the fund
Shalamuka Foundation; supporting a broad- Initiative is aimed to reduce the funding gap
based education initiative for black woman that early-stage and growth entrepreneurs
teachers face
R386m under management Jobs Fund Provides access to C-suite level mentors
R127 million
High job creation - Vumela has created
1 395 new direct jobs to date
Uber SA, WesBank and Vumela entered into
an initiative which aims to create 1 000
micro-enterprises and empower drivers
26
Save costs eBucks for Business, Bundled pricing options, pay only when you use facilities,
free accounting solutions and document retention
Business
innovation Endeavor partnership
awards
Accelerators/
Grindstone, Knife Capital, 10Xe, FNB Accelerator
incubators
28
12 000
10 000
8 000
6 000
4 000
2 000
-
2012 2013 2014 2015 2016
31
500
400
300
200
100
0
2012 2013 2014 2015 2016
* FRF = FirstRand Foundation, FRSAT = FirstRand Staff Assistance Trust, FREF = FirstRand Empowerment Foundation
32
Since 1998, the groups direct value creation has exceeded R1 trillion
Direct value creation refers to the money paid to stakeholders in the course of doing business
which includes profits made by the business and the expenses paid to create those profits
76% black
13% 34% black top management
22% Employees
Shareholders 36.5% black, 16.1% black female
14% 7%
R810m
annual skills
spend
33% 46%
54 000
45 000
36 000
27 000
18 000
9 000
-
2012 2013 2014 2015 2016
Since 2012 RMB has committed an average of R10.5 billion per year to new transformational infrastructure projects
Of the total R53 billion in funding:
R21 billion went to renewable energy projects representing RMBs commitment to clean energy,
R10.5 billion went to initiatives run by municipalities or SOEs, reflecting an ongoing collaboration with the
public sector to increase SAs potential for economic growth and development and R5.5 billion went to
transport projects to strengthen the infrastructure required for SAs multi-modal transportation system.
In 2014, RMB advised Alstom on the R51 billion Gibela project which was a historic agreement with PRASA
to supply 600 passenger trains between 2015 and 2025
35
RMB Morgan Stanley recently launched a programme that provides BEE brokers (who generally
require technology to cater to a sophisticated client base) access to its Algo platform. This gives
brokers the ability to offer large buy-side institutions access to Morgan Stanley Algo which would
effectively execute trades on their behalf
36
ECD
(0 to 5 years)
World of work
37
FirstRand Volunteers
As a good corporate citizen, and in line with its values, FirstRand facilitates and encourages
employees to donate both time and money to non-profit organisations and schools that they
are passionate about through a structured volunteers programme
62 FirstRand teams/schools across the country (business units across the franchises) have
registered to receive R10 000 to assist an underprivileged day care centre, crche or school
School Education Drive
Total of 80 FirstRand teams can qualify to receive this funding
Schools are all registered non-profit organisations
Run by NGO Symphonia, where business leaders are matched with an underprivileged
FirstRand/Symphonia government school principal for one year
Principles for Possibility
Leadership Programme FirstRand business leader works with the principal to identify issues of concern in the school in
order to improve the day to day running of the school
7 FirstRand employees have been matched with 7 Grade 11 girls at the RW Fick Secondary
FirstRand/Khulisa
School in Westbury to help young girls in underprivileged communities with challenges of day
Mentorship Programme
to day life, academics and career choices