Johannesburg - About 80 percent of Absa's R120 million infrastructure investment would be spent on rolling out services to black consumers in the next year, the bank said yesterday.

Louis von Zeuner, the group executive director, said R50 million would be spent on the establishment of four fully fledged branches - two in Soweto, one in Khayelitsha outside Cape Town and another in Mamelodi outside Pretoria - and 13 community banks.

Another R10 million had been set aside for remote ATMs.

Von Zeuner said the balance of the capital expenditure into underserviced areas would be made through partnerships with two retail providers and a cellular operator, which would establish alliances for alternative delivery of services to black consumers.

"We are considering further expansion of our footprint and an additional sizeable amount of between R10 million and R15 million could go into these partnerships," he said.

Absa's roll-out, part motivated by profit and part by the requirement of the financial services charter that existing banks help broaden banking access, has been prioritised as Absa strives to stay ahead of the retail banking pack.

The country's largest retail bank, with 5.7 million clients, Absa said black account holders made up just 37.3 percent of its customer base.

"Growth in the customer base, and especially the black customer base, remains a core performance driver but never at the expense of any of our other businesses," said Von Zeuner.

Financial services companies last year agreed to offer basic banking access to the estimated 17 million South Africans who have no accounts.

The charter also requires lenders to provide 80 percent of the population with access to banking services within 20km of their homes by 2008.

According to FinMark Trust, the reason that two out of three South Africans do not have a bank account is the industry's failure to provide products for those who have low or irregular incomes.

FinMark Trust's Finscope 2003, a survey of financial services needs and usage patterns, showed that while only 51 percent of South Africans had a relationship with a bank, 19 percent had store or loyalty cards and 6 percent a housing loan. It revealed that only 3 percent of the population had a bank account, a loan and a bond.

The study showed that 70 percent of South Africans would consider putting their money into a savings account, while 39 percent would rather start their own business.

Thirty-seven percent said they would spend their money on home improvements, 33 percent said they would invest in a burial policy and 31 percent in an insurance policy.

It is the cross-selling potential of the as yet untapped mass market that excites banks.

"There is real opportunity for growth in the market for low-income earners who make less than R5 000 a month and account for 60 percent of Absa's customers," said Jenny Tyobeka, the group executive of FlexiBanking services at Absa.

The bank is hoping that once people are in the system, they may pick up more products as their incomes rise.

"The percentage of the unbanked is a reflection of the development of an economy," said Tyobeka.

In the UK only 10 percent of the population was unbanked, while in Brazil, which is often compared to South Africa's developing economy, the figure was 57 percent, she said.

"In relative terms we are not doing badly but it is not acceptable," Tyobeka said.