The Banking Association of South Africa (BASA) said the 2024 transformation in banking report, which will be released soon, showed there has been consistent improvement in key transformation expectations in bank ownership over the years, except during the Covid-19 pandemic.
Briefing the joint meeting of the standing committee on finance and portfolio commit on trade, industry and competition on Tuesday, BASA managing director Bongi Kunene used the occasion to give highlights of the report covering the period between 2018 and 2023.
“In 2023, the banking industry exceeded targets for voting rights and economic interests by black, black women and designated groups,” she said.
Kunene also said in terms of management, there was a strong pipeline of black senior and middle managers that had been developed by the banks.
“There has been a significant investment in skills development, meaning senior managers will better reflect demographics as we go along.”
She said there has been ongoing transformation and skills development to focus on women in management at banks.
“There is an increasing prioritisation of women managers within the banking sector. Sixty-two are junior managers, 38 middle managers, 25 senior, and 11 top senior bank managers.
At board level, 24 black directors were women.
She said the banks have collectively spent R337 billion on empowerment financing.
“This amount covers empowerment and transformational infrastructure. This category includes affordable housing, black SMMEs, and black-led-economic empowerment transformation.”
Kunene also stated that, in terms of supplier development, the banks spent R1.8 billion, including R216 million on enterprise development and support for micro and small businesses.
“The biggest portion of banks’ spend would go to preferential procurement scorecards. It has reached R133 billion.”
She said a lot of progress has been made by the banks to provide accounts in terms of the Financial Sector Conduct Authority.
“Banks provided R23m financial products and spent R237m on consumer financial education in 2023. This on its own takes us to inclusive economic growth.”
She also said progress for inclusive growth was being made.
Kunene said no member of BASA was found guilty in a court of law of systemic or institutionalised racism.
She indicated that BASA did not resolve customer complaints involving their members.
On the closure of bank accounts, Kunene said banks give reasonable prior notice before closing an account.
“That is done to provide customers with an opportunity to engage the bank and be heard.”
Kunene stated that banks have a right to close accounts to prevent accounts being used to commit criminal activities.
“They have to do so in a manner that complies with the law and respects the rights of customers.”
She also said banks have to comply with contract law, which was clear what they have to do if they refuse to establish or terminate an account.
“All of this must be done in a manner the contract is lawful and does not violate public policy and constitutional values.”
Kunene also said while courts have confirmed banks’ right to close accounts on reasonable notice, a third party may not instruct a bank to reinstate a banking relationship.
