By: DENVER KISTING
TWO of Namibia’s largest banks announced interest rate cuts yesterday after the Bank of Namibia (BoN) said the repo rate will decrease from 6,75 per cent to 6 per cent today – the lowest ever in independent Namibia.
The BoN’s announcement that the rate at which it lends money to the commercial banks will be lowered has resulted in Bank Windhoek and First National Bank (FNB) cutting their interest rates.
Bank Windhoek in fact cut its prime lending rate and mortgage lending rate yesterday already.
The prime rate was reduced by 75 basis points from 10,5% to 9,75%, whilst the mortgage lending rate is down to 10,75% from 11,5%.
From Monday, FNB’s interest rates will also be slashed by 75 basis points and will be the same as those of Bank Windhoek, spokesperson Dawn Humphries said yesterday.
NedBank acting managing director Debbie Smit said the bank’s executive committee will meet today to decide whether they will also adjust their interest rates.
Earlier this year, the BoN caused uproar in the banking sector when it called on commercial banks to bring down their prime lending rates to reduce the gap between them and the repo rate.
Making the announcement yesterday, BoN Governor Ipumbu Shiimi said they are “of the view that a further round of monetary easing is justified to mitigate the weaknesses in the real sector and boost growth on the demand side”.
He said as result of the inflation rate rising from 3,2 per cent in October to 3,4 per cent in November – a “subdued inflationary environment for the short to medium term” – further space was provided for monetary easing.
According to Shiimi, the slight increase in inflation is “not a worrying development”.
He singled out the mining sector as the largest contributor to “the robust performance witnessed in the primary industry”.
www.namibian.com.na
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Monday 20 December 2010
FNB, BEMA launch e-card
MPHO TLALE
Correspondent
The Botswana Export and Manufacturers Association (BEMA) has partnered with First National Bank Botswana (FNBB) to launch an electronic business card.
Known as BEMA Business E-Card, it has been described as "a multimedia marketing tool designed to expose the capability of companies established in Botswana in a visual and interactive manner, showcasing a true picture of the country's immense potential".Speaking at the launch in Gaborone yesterday, the Minister of Trade and Industry, Dorcus Makgato-Malesu, said the e-card is a welcome initiative that demonstrates BEMA's commitment to fulfilling its mandate of export development.
She congratulated BEMA and said when a BEMA team first showed her the e-card concept during its initial stages, she embraced it as a brilliant idea and did not hesitate to confirm her ministry's support for it.
The e-card could be regarded as the first e-ambassador of Botswana's trade and commerce to the world because it will be distributed to Botswana's foreign missions and feature on the agenda of trade missions and exhibitions around the globe, she added.
Makgato-Malesu revealed that the BEMA and FNB partnership would go further and lead to a trading portal in the form of an export house.
Also speaking at the launch, BEMA president Booker Bannister said the ever-increasing demand in the business and manufacturing environment dictated that producers and service providers were well informed, professional and highly competitive in order to remain in business.
Bannister pointed out that the initiative of the e-card was meant to overcome challenges that came with strengthening BEMA's participation in the global economy.
The BEMA e-card is shaped like the map of Botswana. It is an interactive CD that will showcase BEMA members and their products and services. The CD will also have images of Botswana, video clips and virtual tours aimed at attracting and encouraging foreign investors to either visit or invest in Botswana.
The Head of Commercial Banking at FNBB, Boiki Bema, said the "exciting partnership" seeks to advance economic growth and diversification.
Bema said international trade is taking the centre-stage as businesses seek new territories to expand their client bases. This should, in turn, be taken seriously in Botswana for local businesses to expand their operations and seek new trade frontiers abroad.
Correspondent
The Botswana Export and Manufacturers Association (BEMA) has partnered with First National Bank Botswana (FNBB) to launch an electronic business card.
Known as BEMA Business E-Card, it has been described as "a multimedia marketing tool designed to expose the capability of companies established in Botswana in a visual and interactive manner, showcasing a true picture of the country's immense potential".Speaking at the launch in Gaborone yesterday, the Minister of Trade and Industry, Dorcus Makgato-Malesu, said the e-card is a welcome initiative that demonstrates BEMA's commitment to fulfilling its mandate of export development.
She congratulated BEMA and said when a BEMA team first showed her the e-card concept during its initial stages, she embraced it as a brilliant idea and did not hesitate to confirm her ministry's support for it.
The e-card could be regarded as the first e-ambassador of Botswana's trade and commerce to the world because it will be distributed to Botswana's foreign missions and feature on the agenda of trade missions and exhibitions around the globe, she added.
Makgato-Malesu revealed that the BEMA and FNB partnership would go further and lead to a trading portal in the form of an export house.
Also speaking at the launch, BEMA president Booker Bannister said the ever-increasing demand in the business and manufacturing environment dictated that producers and service providers were well informed, professional and highly competitive in order to remain in business.
Bannister pointed out that the initiative of the e-card was meant to overcome challenges that came with strengthening BEMA's participation in the global economy.
The BEMA e-card is shaped like the map of Botswana. It is an interactive CD that will showcase BEMA members and their products and services. The CD will also have images of Botswana, video clips and virtual tours aimed at attracting and encouraging foreign investors to either visit or invest in Botswana.
The Head of Commercial Banking at FNBB, Boiki Bema, said the "exciting partnership" seeks to advance economic growth and diversification.
Bema said international trade is taking the centre-stage as businesses seek new territories to expand their client bases. This should, in turn, be taken seriously in Botswana for local businesses to expand their operations and seek new trade frontiers abroad.
Monday 13 December 2010
FNB Connect banks on voice and data
Farren Roper, Operations Manager at FNB Connect, a division within First National Bank that provides converged voice and data solutions to customers, talks to ITNewsAfrica.com about their FNB Connect phone application and its impact on the mobile market.
ITNewsAfrica.com: What is FNB Connect’s strategy in the telecoms space?
Farren Roper: Our goal is always to add value to our customers by creating savings on their phone and Internet bills – South Africans particularly are demanding low-cost telecommunication solutions. We are not just a bank, we believe in a convergence of banking and telecommunication solutions. As an example, we launched a service to reward FNB cheque account individual holders with up to 1GB free data bundles when they register for free with FNB Connect and offered a trial 1GB free data bundle for non-FNB customers.
ITNewsAfrica.com: What innovative services has FNB Connect introduced lately?
Farren Roper: The last months have been quite innovative for us. As part of our ConnectSurf offerings, we have introduced in November ADSL data bundles up to 50GB for as little as R12,50/GB. Selling free bandwidth capacity at a sustainable level allows our customers to benefit even more from reduced rates.
At the time when we launched (2008) we could offer ADSL data at a flat rate of R59 per GB, now we bring competitive ADSL data bundles to the market, 3G Vodacom packages and Wi-Fi vouchers. Our business model is virtual and mobile, with no fixed line infrastructure in place.
Mobility is key in South Africa and there is a strong opportunity in making voice and data convergence on mobile devices, something we have achieved with ConnectTalk’s innovative application, the Connect phone software application which is available for download on compatible cellphones supporting Symbian, Windows Mobile and most recently iPhone OS, iPod Touch and Android.
ITNewsAfrica.com: In what ways will this application fill gaps in the market?
Farren Roper: The application features a personalized 087 number, free VoIP calls, free integrated messaging, direct imported contacts, up to 100 min voice recording, fax functionality, free calls to FNB service numbers and location-based services (GPS). The application runs on Wi-Fi, 3G and ADSL networks.
We aim to bring it out to cellphones that cover the bulk of the market. BlackBerry is the next target, a difficult task since it has its own free Instant Messaging tool.
ITNewsAfrica.com: How has the application been received so far?
Farren Roper: We had almost 80, 000 downloads since the application was launched last year, which exceeded our expectations. Certainly, voice is still predominant in South Africa, where data penetration is low and VoIP is seriously taking off.
The application is not only offering free on-net calls, but also cheap off net calls. Prior to ICASA’s announcement of interconnection call rates dropping from R1,25 to 89c per minute, we had already enforced local mobile call rates of 99c/min, off-peak mobile call rates at 79c/min and SMSes at 35c, below what the market offered at the time.
We currently have a promotional strategic offer of 25c/min for both local and international calls, to end 22 January 2011.
ITNewsAfrica.com: Will this force operators to further lower their rates, in your opinion?
Farren Roper: Our call rates could very well drop further or the offer could be extended. On a similar note, the retail call rates are expected to drop further to as little as 40c by 2012, as enforced by the regulator. I believe the real challenge here is actually the customers‘ education around call rates in a price-sensitive market. We have gone this far to post a comparative rate calculator tool on our webpage. Technically, we focus on the pre paid market where consumer can understand what they are paying for.
ITNewsAfrica.com: What is next for FNB Connect?
Farren Roper: Until broadband penetration increases, the benefits are not going to filter down to the consumer and we want to address this with our customers, in particular with our FNB clients – through value-add, attraction and retention offers.
Our end-goal is to provide our application on any device and we hope that the decrease in call rates and the improvements in the smartphone penetration rate in South Africa will create better products for FNB Connect to meet its purpose.
Going forward, we aim to become a one-stop-shop for all banking and telecommunication requirements. We have exciting plans for next year, so watch this space!
By Denisa Oosthuizen
ITNewsAfrica.com: What is FNB Connect’s strategy in the telecoms space?
Farren Roper: Our goal is always to add value to our customers by creating savings on their phone and Internet bills – South Africans particularly are demanding low-cost telecommunication solutions. We are not just a bank, we believe in a convergence of banking and telecommunication solutions. As an example, we launched a service to reward FNB cheque account individual holders with up to 1GB free data bundles when they register for free with FNB Connect and offered a trial 1GB free data bundle for non-FNB customers.
ITNewsAfrica.com: What innovative services has FNB Connect introduced lately?
Farren Roper: The last months have been quite innovative for us. As part of our ConnectSurf offerings, we have introduced in November ADSL data bundles up to 50GB for as little as R12,50/GB. Selling free bandwidth capacity at a sustainable level allows our customers to benefit even more from reduced rates.
At the time when we launched (2008) we could offer ADSL data at a flat rate of R59 per GB, now we bring competitive ADSL data bundles to the market, 3G Vodacom packages and Wi-Fi vouchers. Our business model is virtual and mobile, with no fixed line infrastructure in place.
Mobility is key in South Africa and there is a strong opportunity in making voice and data convergence on mobile devices, something we have achieved with ConnectTalk’s innovative application, the Connect phone software application which is available for download on compatible cellphones supporting Symbian, Windows Mobile and most recently iPhone OS, iPod Touch and Android.
ITNewsAfrica.com: In what ways will this application fill gaps in the market?
Farren Roper: The application features a personalized 087 number, free VoIP calls, free integrated messaging, direct imported contacts, up to 100 min voice recording, fax functionality, free calls to FNB service numbers and location-based services (GPS). The application runs on Wi-Fi, 3G and ADSL networks.
We aim to bring it out to cellphones that cover the bulk of the market. BlackBerry is the next target, a difficult task since it has its own free Instant Messaging tool.
ITNewsAfrica.com: How has the application been received so far?
Farren Roper: We had almost 80, 000 downloads since the application was launched last year, which exceeded our expectations. Certainly, voice is still predominant in South Africa, where data penetration is low and VoIP is seriously taking off.
The application is not only offering free on-net calls, but also cheap off net calls. Prior to ICASA’s announcement of interconnection call rates dropping from R1,25 to 89c per minute, we had already enforced local mobile call rates of 99c/min, off-peak mobile call rates at 79c/min and SMSes at 35c, below what the market offered at the time.
We currently have a promotional strategic offer of 25c/min for both local and international calls, to end 22 January 2011.
ITNewsAfrica.com: Will this force operators to further lower their rates, in your opinion?
Farren Roper: Our call rates could very well drop further or the offer could be extended. On a similar note, the retail call rates are expected to drop further to as little as 40c by 2012, as enforced by the regulator. I believe the real challenge here is actually the customers‘ education around call rates in a price-sensitive market. We have gone this far to post a comparative rate calculator tool on our webpage. Technically, we focus on the pre paid market where consumer can understand what they are paying for.
ITNewsAfrica.com: What is next for FNB Connect?
Farren Roper: Until broadband penetration increases, the benefits are not going to filter down to the consumer and we want to address this with our customers, in particular with our FNB clients – through value-add, attraction and retention offers.
Our end-goal is to provide our application on any device and we hope that the decrease in call rates and the improvements in the smartphone penetration rate in South Africa will create better products for FNB Connect to meet its purpose.
Going forward, we aim to become a one-stop-shop for all banking and telecommunication requirements. We have exciting plans for next year, so watch this space!
By Denisa Oosthuizen
Capitec ups stakes in online banking
Capitec Bank, the country's youngest retail bank, launched an enhanced, online platform as an alternative source of information and assistance to clients on 11 November 2010. "Since its launch, visits to the site have more than doubled compared to those of the previous site over the same period, with just over 250 000 visitors logged. We've already processed almost 7000 interactions and enquiries via the new site, all in less than a month," says Carl Fischer, executive: marketing and corporate affairs at Capitec Bank.
On the same date, the bank also launched a mobi presence alongside the main website, encouraging ease of transition for mobile Internet users. Over 20 000 mobile visits have been logged since its launch.
The bank's new online home allows users to more easily interact with and initiate applications online. Consumers can clearly locate any information on the bank, its offerings and branches through a variety of multimedia content and interactive Google maps. The site also features an innovative personal budget tool and a lost card section to facilitate immediate cancellation and easy communication with the bank. An updated market information section now features share price movement and comparative graphs, reflecting year-on-year and month-on-month information.
Fischer says the new website underscores the bank's continued future vision. "Its business model is based on simplicity, accessibility, affordability and the innovative use of technology. We aspired to reflect this through this new online presence.
"Our focus is to have users understand our banking offer through clear and transparent communication and to create an engaging brand experience, without them having to visit a physical branch.
High Google ranking
Earlier in November, the bank was identified as the 7th most searched topic on Google South Africa during the month of October, which highlights the increasing interest in the brand among South African consumers and the online community.
Design director at Quirk eMarketing, Grant Mclachlan, says, "The re-design of the new website encapsulates the essence of the bank. Simplicity and sophistication played a large role in every aspect of the design, from the interface through to the iconography. It was important that every design element complimented one another to deliver a product which epitomised the positioning of the bank."
[10 Dec 2010 11:53]
On the same date, the bank also launched a mobi presence alongside the main website, encouraging ease of transition for mobile Internet users. Over 20 000 mobile visits have been logged since its launch.
The bank's new online home allows users to more easily interact with and initiate applications online. Consumers can clearly locate any information on the bank, its offerings and branches through a variety of multimedia content and interactive Google maps. The site also features an innovative personal budget tool and a lost card section to facilitate immediate cancellation and easy communication with the bank. An updated market information section now features share price movement and comparative graphs, reflecting year-on-year and month-on-month information.
Fischer says the new website underscores the bank's continued future vision. "Its business model is based on simplicity, accessibility, affordability and the innovative use of technology. We aspired to reflect this through this new online presence.
"Our focus is to have users understand our banking offer through clear and transparent communication and to create an engaging brand experience, without them having to visit a physical branch.
High Google ranking
Earlier in November, the bank was identified as the 7th most searched topic on Google South Africa during the month of October, which highlights the increasing interest in the brand among South African consumers and the online community.
Design director at Quirk eMarketing, Grant Mclachlan, says, "The re-design of the new website encapsulates the essence of the bank. Simplicity and sophistication played a large role in every aspect of the design, from the interface through to the iconography. It was important that every design element complimented one another to deliver a product which epitomised the positioning of the bank."
[10 Dec 2010 11:53]
FNB launches unique eWallet service
LEKOPANYE MOOKETSI
Correspondent
First National Bank Botswana (FNBB) has come up with another first in local banking. The bank has announced the launch of its new eWallet Send Money service.
The new service is used for transferring money to people with cellphones, journalists were briefed during a press conference yesterday.
Bank officials said FNB customers can send money instantly to anyone who has a Botswana cellphone.
The receiver does not need to have a bank account or a bank card to access the money. They can simply withdraw their money from one of the ATMs machines. Recipients, who are not FNB customers, are provided with temporary PIN numbers that they could use to access the ATMs.
"FNB's eWallet Send Money service offers money senders an instant and secure money transfer service, as well as offering receivers various electronic transaction options," says Thato Kubu, manager of electronic banking at FNB.
The receiver gets an automated SMS telling them how much money has been sent and instructing them how to get the money.
The receiver can then request for a temporary ATM PIN to withdraw the money at FNB ATMs without the need for a bank card.
FNB's Segment Head of Public Sector, Yolisa Phillips-Lejowa said according to the FinScope Botswana 2009 survey, more than half of the adult population remains unbanked. She said many people still send money by bus, kombi or through friends. She finds this to be costly, slow, insecure and unreliable. She said the recipient also receives the money in cash and the likelihood of spending it all spontaneously is increased. "The new FNB eWallet Send Money service is the perfect solution to these problems," she said. "FNB customers can send money instantly, at any time of the day or night, without having to wait for the branches to open the next day.
"We are providing our customers with a secure way to send money to loved ones when they need it. It is also incredibly simple to use. When you consider our footprint you will realise that this is a truly national money transfer service," said Kubu. He said FNB ATMs are available in 100 locations country-wide including in small villages like Bobonong, Ramotswa and Thamaga.
The bank official said there are no bank charges for withdrawing at ATMs. He said eWallet Send Money service receivers will have immediate access to all the money sent to them.
"Withdrawals can be made in full, or receivers may choose to withdraw part of the money and keep the rest in a eWallet for future use. FNB has put in place a number of consumer education initiatives in branches to ensure a better understanding of the sending and receiving process."
Part of the attraction to the payment service is that it makes use of the cellphone. This device, which is being used by more than 90 percent of Batswana is closing the distance between sender and receiver.
Through the use of the cellphone we are bringing innovative payment services to consumers from all walks of life.
With Send Money and other innovations from FNB, we are committed to bridging the gap between the banked and unbanked. Through the use of innovative technologies we believe that we will be able to significantly change the way people manage their money," said Phillips Lejowa.
While addressing journalists, FNB chief executive officer, Lorato Boakgomo-Ntakhwana said the eWallet Send Money service is an instant solution for FNB customers to transfer money to anyone with a Botswana mobile phone.
She said what makes this different from other bank's products was that the receiver does not need a bank account or bank card. "Whilst the sender has to be an FNB account holder, all the receiver needs is a cellphone," she said.
"It goes without saying that Botswana is an African success story. We lead Africa in several development indicators. Nevertheless, far too many Batswana are what we, in the banking sector call - unbanked.
In numerical terms the unbanked constitute more than half the population of this country. We at FNB believe that it is a great step forward for convenience. Making efficient use of technology is a key priority for FNB."
Boakgomo-Ntakhwana said the eWallet service offers a powerful proposition for their customers.
"We are shifting what is traditionally an over-the-counter transaction to an instantaneous experience that can be performed literally anywhere and at any time. This is an extension of our efforts to offer more seamless and convenient banking choices to our customers," she said.
"Among other things our commitment to sustainability means that we are constantly exploring ways to reach out to the under banked sector and unbanked people in Botswana.
And we recognise that our stature and pre-eminent position comes with a responsibility, to act in a sustainable way, to act in the national interest and to lead in the conquest of new frontiers in banking and transactional convenience." She said the new service reduces the cost of transaction as the costs associated with putting up bricks and mortar and services related are drastically reduced.
Correspondent
First National Bank Botswana (FNBB) has come up with another first in local banking. The bank has announced the launch of its new eWallet Send Money service.
The new service is used for transferring money to people with cellphones, journalists were briefed during a press conference yesterday.
Bank officials said FNB customers can send money instantly to anyone who has a Botswana cellphone.
The receiver does not need to have a bank account or a bank card to access the money. They can simply withdraw their money from one of the ATMs machines. Recipients, who are not FNB customers, are provided with temporary PIN numbers that they could use to access the ATMs.
"FNB's eWallet Send Money service offers money senders an instant and secure money transfer service, as well as offering receivers various electronic transaction options," says Thato Kubu, manager of electronic banking at FNB.
The receiver gets an automated SMS telling them how much money has been sent and instructing them how to get the money.
The receiver can then request for a temporary ATM PIN to withdraw the money at FNB ATMs without the need for a bank card.
FNB's Segment Head of Public Sector, Yolisa Phillips-Lejowa said according to the FinScope Botswana 2009 survey, more than half of the adult population remains unbanked. She said many people still send money by bus, kombi or through friends. She finds this to be costly, slow, insecure and unreliable. She said the recipient also receives the money in cash and the likelihood of spending it all spontaneously is increased. "The new FNB eWallet Send Money service is the perfect solution to these problems," she said. "FNB customers can send money instantly, at any time of the day or night, without having to wait for the branches to open the next day.
"We are providing our customers with a secure way to send money to loved ones when they need it. It is also incredibly simple to use. When you consider our footprint you will realise that this is a truly national money transfer service," said Kubu. He said FNB ATMs are available in 100 locations country-wide including in small villages like Bobonong, Ramotswa and Thamaga.
The bank official said there are no bank charges for withdrawing at ATMs. He said eWallet Send Money service receivers will have immediate access to all the money sent to them.
"Withdrawals can be made in full, or receivers may choose to withdraw part of the money and keep the rest in a eWallet for future use. FNB has put in place a number of consumer education initiatives in branches to ensure a better understanding of the sending and receiving process."
Part of the attraction to the payment service is that it makes use of the cellphone. This device, which is being used by more than 90 percent of Batswana is closing the distance between sender and receiver.
Through the use of the cellphone we are bringing innovative payment services to consumers from all walks of life.
With Send Money and other innovations from FNB, we are committed to bridging the gap between the banked and unbanked. Through the use of innovative technologies we believe that we will be able to significantly change the way people manage their money," said Phillips Lejowa.
While addressing journalists, FNB chief executive officer, Lorato Boakgomo-Ntakhwana said the eWallet Send Money service is an instant solution for FNB customers to transfer money to anyone with a Botswana mobile phone.
She said what makes this different from other bank's products was that the receiver does not need a bank account or bank card. "Whilst the sender has to be an FNB account holder, all the receiver needs is a cellphone," she said.
"It goes without saying that Botswana is an African success story. We lead Africa in several development indicators. Nevertheless, far too many Batswana are what we, in the banking sector call - unbanked.
In numerical terms the unbanked constitute more than half the population of this country. We at FNB believe that it is a great step forward for convenience. Making efficient use of technology is a key priority for FNB."
Boakgomo-Ntakhwana said the eWallet service offers a powerful proposition for their customers.
"We are shifting what is traditionally an over-the-counter transaction to an instantaneous experience that can be performed literally anywhere and at any time. This is an extension of our efforts to offer more seamless and convenient banking choices to our customers," she said.
"Among other things our commitment to sustainability means that we are constantly exploring ways to reach out to the under banked sector and unbanked people in Botswana.
And we recognise that our stature and pre-eminent position comes with a responsibility, to act in a sustainable way, to act in the national interest and to lead in the conquest of new frontiers in banking and transactional convenience." She said the new service reduces the cost of transaction as the costs associated with putting up bricks and mortar and services related are drastically reduced.
Absa still keen on Namibia as part of its Africa plan
Dec 11, 2010 4:39 PM | By THEKISO ANTHONY LEFIFI
--------------------------------------------------------------------------------
ABSA still intends to increase its presence in Namibia despite failing to secure a local lender in the region earlier this year, says John Gachora, the head of Africa at Absa Capital.
The African expansion plan follows that of competitors such as Standard Bank, which has a 10-year start on the continent.
Earlier this year Namibia authorities blocked Absa's bid to gain control of Bank Windhoek, citing concern about foreign dominance.
However, the Namibians have since announced that they will allow "credible foreign banking institutions" to open branches in the country to promote competition in an industry that is dominated by a handful of lenders.
Gachora is tasked with growing Absa's presence in Africa.
The financial services group has a representative office in Namibia and one in Nigeria through Absa Capital.
Gachora is "very cautious" about the most populous country in Africa, considering what has transpired in the country's banking sector in recent years.
Nigerian authorities spent $4-billion bailing out nine banks last year.
Absa, unlike FirstRand and Standard, has not expressed interest in acquiring any of the distressed banks.
Absa Capital's representative office in Nigeria is being used by the group to gain insight into the market. Yet Gachora said Absa was aware that one "cannot be big in Africa banking if you are not in Nigeria".
He has a three-pronged approach to expanding Absa's African presence.
The first step is to continue investing where Absa is already operating, such as in Mozambique and Tanzania.
The second is to leverage parent company Barclay's presence in nine countries.
"We intend to use its footprint to sell products it does not offer," Gachora said.
The third part of the strategy is to grow the company in new markets such as Nigeria and Namibia and look at returning to Angola.
Absa once had 50% of Banco Comercial Angolano, but sold out.
--------------------------------------------------------------------------------
ABSA still intends to increase its presence in Namibia despite failing to secure a local lender in the region earlier this year, says John Gachora, the head of Africa at Absa Capital.
The African expansion plan follows that of competitors such as Standard Bank, which has a 10-year start on the continent.
Earlier this year Namibia authorities blocked Absa's bid to gain control of Bank Windhoek, citing concern about foreign dominance.
However, the Namibians have since announced that they will allow "credible foreign banking institutions" to open branches in the country to promote competition in an industry that is dominated by a handful of lenders.
Gachora is tasked with growing Absa's presence in Africa.
The financial services group has a representative office in Namibia and one in Nigeria through Absa Capital.
Gachora is "very cautious" about the most populous country in Africa, considering what has transpired in the country's banking sector in recent years.
Nigerian authorities spent $4-billion bailing out nine banks last year.
Absa, unlike FirstRand and Standard, has not expressed interest in acquiring any of the distressed banks.
Absa Capital's representative office in Nigeria is being used by the group to gain insight into the market. Yet Gachora said Absa was aware that one "cannot be big in Africa banking if you are not in Nigeria".
He has a three-pronged approach to expanding Absa's African presence.
The first step is to continue investing where Absa is already operating, such as in Mozambique and Tanzania.
The second is to leverage parent company Barclay's presence in nine countries.
"We intend to use its footprint to sell products it does not offer," Gachora said.
The third part of the strategy is to grow the company in new markets such as Nigeria and Namibia and look at returning to Angola.
Absa once had 50% of Banco Comercial Angolano, but sold out.
Wednesday 08 December 2010
South Africans turn to ‘formal’ finances
Last year’s recession forced people to save more money, now over 76% of South Africans have access to formal financial products.
SURE KAMHUNGA
Published: 2010/12/08 06:51:50 AM
MORE than 76% of SA’s adult population now has access to formal financial products, up from nearly 74% last year.
In addition, the rate of savings continues to improve. This is being partly attributed to last year’s devastating recession, which prompted more people to start setting aside money for a rainy day.
These are some of the findings of the annual FinScope SA study on financial inclusion, which was released in Sandton yesterday.
"In 2010, 76,5% of South African adults were financially included (that is, using some financial product or service from either the formal or informal sectors) compared to 73,9% in 2009 and 76,4% in 2008. The levels of formal inclusion for 2010 have increased, surpassing the levels of 2008," the survey said.
It indicated that 67,6% of adults had or were using formal financial products, either from a retail bank or other financial institutions. This was an increase from 63,6% last year and 65,8% the year before.
The survey provides useful information for banks, which are competing for market share, particularly in the unbanked population.
Larger banks have realised the potential of the unbanked market following the significant inroads that smaller rivals such as Capitec Bank and African Bank have already made into this segment.
"The overall levels of financial inclusion have returned to the 2008 levels, after the significant decline reported in the 2009 survey results, which was attributed to the global recession," the survey said.
The proportion of adults who relied only on the informal sector to manage their money continued to fall. This year , 8,9% adults relied on the informal sector only, whereas last year , this proportion was 10,3% and in 2008 it was 10,7%.
"Main drivers for the increase in the use of formal products and services and less reliance on informal products and mechanisms included a shift away from informal savings towards formal savings products, as well as a shift away from informal insurance towards formal insurance (especially burial coverage)."
The survey further revealed that the proportion of South Africans with savings products had increased to 35% this year , up from 34% last year and 29% in 2008 .
"There is also a significant shift away from saving by means of keeping money at home and/or using informal products, towards saving by means of formal products."
A senior economist at Momentum (now merged with Metropolitan), Sheshi Kaniki, said the survey suggested the global financial crisis had a positive effect on the financial conduct of many households.
"The percentage of households saving with bank and non-bank institutions has increased, as has the percentage saving towards retirement," he said.
The survey said 24% of South African adults saved using formal saving products this year and 18% using informal mechanisms.
kamhungas@bdfm.co.za
In comparison, last year in 2009, 21% used formal savings products and 10,5% used informal mechanisms. Seven percent saved at home this year in 2010 compared to 13% last year in 2009.
kamhungas@bdfm.co.za
SURE KAMHUNGA
Published: 2010/12/08 06:51:50 AM
MORE than 76% of SA’s adult population now has access to formal financial products, up from nearly 74% last year.
In addition, the rate of savings continues to improve. This is being partly attributed to last year’s devastating recession, which prompted more people to start setting aside money for a rainy day.
These are some of the findings of the annual FinScope SA study on financial inclusion, which was released in Sandton yesterday.
"In 2010, 76,5% of South African adults were financially included (that is, using some financial product or service from either the formal or informal sectors) compared to 73,9% in 2009 and 76,4% in 2008. The levels of formal inclusion for 2010 have increased, surpassing the levels of 2008," the survey said.
It indicated that 67,6% of adults had or were using formal financial products, either from a retail bank or other financial institutions. This was an increase from 63,6% last year and 65,8% the year before.
The survey provides useful information for banks, which are competing for market share, particularly in the unbanked population.
Larger banks have realised the potential of the unbanked market following the significant inroads that smaller rivals such as Capitec Bank and African Bank have already made into this segment.
"The overall levels of financial inclusion have returned to the 2008 levels, after the significant decline reported in the 2009 survey results, which was attributed to the global recession," the survey said.
The proportion of adults who relied only on the informal sector to manage their money continued to fall. This year , 8,9% adults relied on the informal sector only, whereas last year , this proportion was 10,3% and in 2008 it was 10,7%.
"Main drivers for the increase in the use of formal products and services and less reliance on informal products and mechanisms included a shift away from informal savings towards formal savings products, as well as a shift away from informal insurance towards formal insurance (especially burial coverage)."
The survey further revealed that the proportion of South Africans with savings products had increased to 35% this year , up from 34% last year and 29% in 2008 .
"There is also a significant shift away from saving by means of keeping money at home and/or using informal products, towards saving by means of formal products."
A senior economist at Momentum (now merged with Metropolitan), Sheshi Kaniki, said the survey suggested the global financial crisis had a positive effect on the financial conduct of many households.
"The percentage of households saving with bank and non-bank institutions has increased, as has the percentage saving towards retirement," he said.
The survey said 24% of South African adults saved using formal saving products this year and 18% using informal mechanisms.
kamhungas@bdfm.co.za
In comparison, last year in 2009, 21% used formal savings products and 10,5% used informal mechanisms. Seven percent saved at home this year in 2010 compared to 13% last year in 2009.
kamhungas@bdfm.co.za
Tuesday 07 December 2010
Consumer-friendly products would be a ‘great thing’
December 6, 2010
By Bruce Cameron Personal Finance
Old Mutual this week published its bi-annual Savings Monitor, which surveys the savings behaviour and attitudes of 1 000 households in the main metropolitan areas.
The main findings are:
The current working generation is the “sandwich generation”. In other words, it is increasingly likely that this generation will have to support both its children and its parents. This undermines its ability to save for retirement, which means that it in turn will become dependent on the next generation.
Attitudes to saving are gradually changing. The percentage of participants surveyed who said they could not get by without buying on credit fell since the November 2009 survey, from 48 percent to 43 percent, while the percentage of people surveyed who regard saving as a non-priority dropped from 33 percent to 24 percent.
Awareness of the need to save does not necessarily lead to actual saving, with many people simply procrastinating – to their detriment.
Overall savings as a percentage of income has increased steadily over the past 18 months, from 15 percent to 20 percent of after-tax income. (The monitor includes all types of savings, including using income to pay off debt faster.) This, however, has occurred in an environment where inflation and interest rates are falling and the stock market is recovering.
People in the lowest income group (those who earn up to R6 000 a month) are, not surprisingly, the worst savers, because most of their money goes towards buying essentials of daily life.
People who earn more than R20 000 a month save the most. They are also most likely to invest their savings in formal products such as retirement annuities, collective investments and life assurance endowments.
Most people have taken advantage of lower interest rates to pay down their debt.
Many of the above findings were fairly predictable, and, although there has been an improvement over the past 18 months, the survey still paints a very worrying picture.
What is also worrying is the shortcomings of the survey. It does not analyse how and why people save. The survey also shows that companies in the traditional formal savings sector are not adapting their products to meet the requirements of most South Africans. They continue to flog inappropriate products.
In its conclusions on the survey, Old Mutual says that “products that have a built-in element of discipline lead to more successful savings”.
Research by Finmark Trust, a non-governmental organisation, shows that lower-income earners have shorter-term savings horizons. They save to pay for things such as school fees. Upper-income earners invest for the long term, for things such as retirement.
Yet companies such as Old Mutual continue to push their high-cost, long-term contractual products, with their attendant confiscatory penalties, on to low- and middle-income earners, without telling them that these products are creating a tax liability that they would otherwise not have had.
Earlier this year, Old Mutual went as far as to make the false claim that a low-income investment product was tax-free. When the error of its ways was pointed out, Old Mutual simply changed the wording of the advertisement to state that the product was tax-free in your hands.
Old Mutual failed to point out that if you bought its product and were on a tax bracket of below about 35 percent, you would incur a tax liability, because life assurance companies pay income tax and capital gains tax on the investment portfolios. This is simply dishonest exploitation. Old Mutual should rather live up to its new catch-phrase, “Do great things”.
Kind of products we need
A great thing would be to create savings products that foster consumer confidence and inspire them to save. The life industry as a whole has done a very good job of undermining public confidence in its savings products, and this has probably spilled over into its inability to sell much-needed risk life assurance against death and disability.
Old Mutual and the life industry, along with the banking industry, should take a close look at the savings products of Capitec Bank.
Now here is a company that is truly doing great things. Its savings products have been designed to meet the savings requirements of lower- to middle-income earners.
I recently interviewed Capitec chief executive Riaan Stassen for the first-quarter 2011 edition of Personal Finance magazine.
He says, correctly, that the difference between lower-income and wealthy people is that wealthy people can afford to invest to make more money, whereas lower-income people build wealth and achieve their financial goals by saving a portion of what they earn. This means that products such as life assurance endowment policies with minimum five-year investment terms and severe penalties if premiums are skipped are unsuitable for lower-income people.
Capitec, with its products, not only tries to encourage saving but it seeks to avoid the downsides of life assurance products.
Capitec is setting a trend by showing that things can be done a lot better. It has also given the lie to the claim by the big banks that they have to levy high charges because they have to service an unprofitable lower-income market. Well, that is exactly where Capitec focused its initial growth. It has brought affordable banking to the market. It is now also attracting many middle- to higher-income earners. There are no complex charges. Its savings and banking products are well integrated and, most importantly, it has the lowest costs in town.
So, Old Mutual, when you bring out the next Savings Monitor six months hence, simultaneously “do great things” by unveiling a new range of products that are designed to help people save, that will not mislead people, that will engender confidence and that are not designed around the remuneration of product floggers.
DISCLOSURE OF THE WRONG KIND
A short swift kick in the pants for linked-investment services provider Automated Outsourcing Services (AOS), which provides the administration platform for most of the exchange traded funds. It managed to send out quarterly Satrix statements addressed to a Dr L – and it provided every other investor with his email address.
AOS assured investors that the “unfortunate error was technical in nature and has no effect on the status or integrity of your investment; and your confidential and personal information was not disclosed to a third party” – except Dr L, that is. This is unacceptable. The question must be: what other technical errors AOS can and does make.
And while on the subject of administrative platforms such as AOS: why do they charge a percentage of assets for an administrative service? Some of their charges are ludicrous. They should be limited to a rand amount.
Most of these platforms are simply a licence to print money, particularly when they have cosy little kickback arrangements with asset management houses. They contribute to undermining the creation of a savings culture.
By Bruce Cameron Personal Finance
Old Mutual this week published its bi-annual Savings Monitor, which surveys the savings behaviour and attitudes of 1 000 households in the main metropolitan areas.
The main findings are:
The current working generation is the “sandwich generation”. In other words, it is increasingly likely that this generation will have to support both its children and its parents. This undermines its ability to save for retirement, which means that it in turn will become dependent on the next generation.
Attitudes to saving are gradually changing. The percentage of participants surveyed who said they could not get by without buying on credit fell since the November 2009 survey, from 48 percent to 43 percent, while the percentage of people surveyed who regard saving as a non-priority dropped from 33 percent to 24 percent.
Awareness of the need to save does not necessarily lead to actual saving, with many people simply procrastinating – to their detriment.
Overall savings as a percentage of income has increased steadily over the past 18 months, from 15 percent to 20 percent of after-tax income. (The monitor includes all types of savings, including using income to pay off debt faster.) This, however, has occurred in an environment where inflation and interest rates are falling and the stock market is recovering.
People in the lowest income group (those who earn up to R6 000 a month) are, not surprisingly, the worst savers, because most of their money goes towards buying essentials of daily life.
People who earn more than R20 000 a month save the most. They are also most likely to invest their savings in formal products such as retirement annuities, collective investments and life assurance endowments.
Most people have taken advantage of lower interest rates to pay down their debt.
Many of the above findings were fairly predictable, and, although there has been an improvement over the past 18 months, the survey still paints a very worrying picture.
What is also worrying is the shortcomings of the survey. It does not analyse how and why people save. The survey also shows that companies in the traditional formal savings sector are not adapting their products to meet the requirements of most South Africans. They continue to flog inappropriate products.
In its conclusions on the survey, Old Mutual says that “products that have a built-in element of discipline lead to more successful savings”.
Research by Finmark Trust, a non-governmental organisation, shows that lower-income earners have shorter-term savings horizons. They save to pay for things such as school fees. Upper-income earners invest for the long term, for things such as retirement.
Yet companies such as Old Mutual continue to push their high-cost, long-term contractual products, with their attendant confiscatory penalties, on to low- and middle-income earners, without telling them that these products are creating a tax liability that they would otherwise not have had.
Earlier this year, Old Mutual went as far as to make the false claim that a low-income investment product was tax-free. When the error of its ways was pointed out, Old Mutual simply changed the wording of the advertisement to state that the product was tax-free in your hands.
Old Mutual failed to point out that if you bought its product and were on a tax bracket of below about 35 percent, you would incur a tax liability, because life assurance companies pay income tax and capital gains tax on the investment portfolios. This is simply dishonest exploitation. Old Mutual should rather live up to its new catch-phrase, “Do great things”.
Kind of products we need
A great thing would be to create savings products that foster consumer confidence and inspire them to save. The life industry as a whole has done a very good job of undermining public confidence in its savings products, and this has probably spilled over into its inability to sell much-needed risk life assurance against death and disability.
Old Mutual and the life industry, along with the banking industry, should take a close look at the savings products of Capitec Bank.
Now here is a company that is truly doing great things. Its savings products have been designed to meet the savings requirements of lower- to middle-income earners.
I recently interviewed Capitec chief executive Riaan Stassen for the first-quarter 2011 edition of Personal Finance magazine.
He says, correctly, that the difference between lower-income and wealthy people is that wealthy people can afford to invest to make more money, whereas lower-income people build wealth and achieve their financial goals by saving a portion of what they earn. This means that products such as life assurance endowment policies with minimum five-year investment terms and severe penalties if premiums are skipped are unsuitable for lower-income people.
Capitec, with its products, not only tries to encourage saving but it seeks to avoid the downsides of life assurance products.
Capitec is setting a trend by showing that things can be done a lot better. It has also given the lie to the claim by the big banks that they have to levy high charges because they have to service an unprofitable lower-income market. Well, that is exactly where Capitec focused its initial growth. It has brought affordable banking to the market. It is now also attracting many middle- to higher-income earners. There are no complex charges. Its savings and banking products are well integrated and, most importantly, it has the lowest costs in town.
So, Old Mutual, when you bring out the next Savings Monitor six months hence, simultaneously “do great things” by unveiling a new range of products that are designed to help people save, that will not mislead people, that will engender confidence and that are not designed around the remuneration of product floggers.
DISCLOSURE OF THE WRONG KIND
A short swift kick in the pants for linked-investment services provider Automated Outsourcing Services (AOS), which provides the administration platform for most of the exchange traded funds. It managed to send out quarterly Satrix statements addressed to a Dr L – and it provided every other investor with his email address.
AOS assured investors that the “unfortunate error was technical in nature and has no effect on the status or integrity of your investment; and your confidential and personal information was not disclosed to a third party” – except Dr L, that is. This is unacceptable. The question must be: what other technical errors AOS can and does make.
And while on the subject of administrative platforms such as AOS: why do they charge a percentage of assets for an administrative service? Some of their charges are ludicrous. They should be limited to a rand amount.
Most of these platforms are simply a licence to print money, particularly when they have cosy little kickback arrangements with asset management houses. They contribute to undermining the creation of a savings culture.
Monday 06 December 2010
FNB looks to staff for ideas on innovation
First National Bank is challenging its staff to come up with innovative ideas for the running of the bank as competition for customers in retail banking intensifies
SURE KAMHUNGA
Published: 2010/12/06 07:04:20 AM
FIRST National Bank (FNB) is challenging its staff to come up with innovative ideas for the running of the bank as competition for customers in retail banking intensifies.
Last week the bank’s CEO, Michael Jordaan, said innovation had become a byword within FNB. "We relentlessly drive the message of innovation throughout the bank. This is not simply an internal slogan; it is a primary way of working in the bank," he said.
"We challenge ideas and seek new ways of banking. Our key driver is to find ideas that are beneficial to our customers, will attract new customers … and will enhance our overall business."
Last week, FNB gave R6m in prize money to internal business teams that developed its new banking technologies , now one of the largest delivery channels for the bank.
The chairman of FNB holding company FirstRand , Laurie Dippenaar , said the culture of innovation reflected the spirit of entrepreneurship of the founders of FirstRand. He is one of the founders of the group.
Large banks have been put on the back foot by rivals such as Capitec Bank and African Bank, which are aggressively growing customer numbers through a no- frills approach to banking.
Such is the intensity of the competition for customers, some analysts have warned that larger banks could find themselves losing market share in the lower end of the market.
This is because of their perceived high transaction fees, inept customer service, and indifference to the needs of the informal and semiliterate section of the population.
Mr Jordaan said FNB would not give up without a fight.
"At FNB we never forget the basic principles of business and the fact that any new service that we introduce has to address a need required by our customers. This is ultimately what FNB Innovators hopes to achieve."
kamhungas@bdfm.co.za
SURE KAMHUNGA
Published: 2010/12/06 07:04:20 AM
FIRST National Bank (FNB) is challenging its staff to come up with innovative ideas for the running of the bank as competition for customers in retail banking intensifies.
Last week the bank’s CEO, Michael Jordaan, said innovation had become a byword within FNB. "We relentlessly drive the message of innovation throughout the bank. This is not simply an internal slogan; it is a primary way of working in the bank," he said.
"We challenge ideas and seek new ways of banking. Our key driver is to find ideas that are beneficial to our customers, will attract new customers … and will enhance our overall business."
Last week, FNB gave R6m in prize money to internal business teams that developed its new banking technologies , now one of the largest delivery channels for the bank.
The chairman of FNB holding company FirstRand , Laurie Dippenaar , said the culture of innovation reflected the spirit of entrepreneurship of the founders of FirstRand. He is one of the founders of the group.
Large banks have been put on the back foot by rivals such as Capitec Bank and African Bank, which are aggressively growing customer numbers through a no- frills approach to banking.
Such is the intensity of the competition for customers, some analysts have warned that larger banks could find themselves losing market share in the lower end of the market.
This is because of their perceived high transaction fees, inept customer service, and indifference to the needs of the informal and semiliterate section of the population.
Mr Jordaan said FNB would not give up without a fight.
"At FNB we never forget the basic principles of business and the fact that any new service that we introduce has to address a need required by our customers. This is ultimately what FNB Innovators hopes to achieve."
kamhungas@bdfm.co.za
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