Absa to widen its insurance net

Published Jun 5, 2019

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JOHANNESBURG – JSE-listed lender Absa is planning to ramp up its life assurance and other insurance products as it completes its complex separation from Barclays in the first half of next year.

Group chairperson Wendy Lucas-Bull told the bank’s annual general meeting (AGM) in Johannesburg yesterday that it would push up the divisions to regain the lost market share. Lucas-Bull said part of the repositioning would involve the appointment of a new chief executive in the next two months to succeed Maria Ramos.

She said regaining leadership in the retail and business banking space in South Africa was a group priority, and that the bank was already seeing positive signs in this regard.

“For instance, Home Loans grew for the first time in several years as it gained share of new business and Retail Transactional Deposits grew for the first time in three years at 11 percent and we continue to see this growth into this year,” Lucas-Bull said.

“The focus has remained on regaining lost market share, retaining the trust and confidence of the customer, and building momentum behind our digitisation initiatives.”

Ramos stepped down as the group’s chief executive in February after a tumultuous 10 years at the helm. The bank appointed veteran René van Wyk to the helm on a temporary basis.

Lucas-Bull said the bank’s separation from Barclays had crossed the halfway mark and was in the final stages of appointing a permanent group chief executive.

She said Absa wanted to sustain its policies in order to strike a fine balance between the risks associated with climate change on the one hand and economic growth and sustainable development on the other.

The rival Standard Bank last month became the first company to table a resolution on any climate-related issue.

Jon Duncan, head of Responsible Investment at Old Mutual Investment, said Standard Bank’s move would see the issues of climate taking a more prominent role in corporate South Africa.

“The climate change debate is an important one and we will continue to actively engage with investee companies to reduce investment risk and, additionally, seek further opportunities to build out our already substantial investments in the low carbon and renewable energy sectors,” Duncan said.

Absa shareholders also shot down the group’s remuneration implementation report after the vote failed to breach the 75 percent threshold.

The reported was rejected by 31.4 percent of shareholders while 68.5 percent endorsed it.

Asief Mohamed, chief investment officer at Aeon Investment Management, said more shareholders were voting against executive remuneration because asset owners and trustees were more aware of Environmental Social and Governance (ESG) issues and the growing inequality gap in South Africa.

“Asset owners and trustees are therefore putting pressure on asset managers to consider ESG and exercise their fiduciary responsibility in proxy voting on their behalf,” Mohamed said.

“The non-binding resolution on the remuneration policy and report must be made binding and if voted against the non-executive board must all come up for re-election soon after the annual general meeting. This change in the Companies Act and JSE listing requirement is long overdue.”

Absa shares declined 4.21 percent on the JSE on Tuesday to close at R165.99.

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