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Home loans Access to incremental housing finance is of vital importance in improving housing conditions for millions of South Africans. Based on a survey conducted by Research Surveys, approximately 16% of ABIL s loans are used for incremental housing construction and home improvement. This percentage applied to ABIL s total advances of R6.1 billion (2003 - R6.2 billion) yields a home loans figure of R980 million (2003 - R 992 million), which is well above the 20% target. debt consolidation and credit

Agriculture loans ABIL s involvement in the agricultural sector at present is in the Kwazulu Natal sugar farming sector where ABIL s SME finance division, ABCommerce purchases receivables from farmers in order to improve their cash flow situation and growth funding capabilities. SME loans ABIL is involved in the SME sector through ABCommerce, ACFC and the Commercial Vehicle Finance business units of the Specialised lending division. ABCommerce is a fairly new business that provides factoring services to the SME market. The core business of Commercial Vehicle Finance is to provide asset-based finance (leases) to enable registered taxi owners to acquire new vehicles. The total advances relating to these businesses, as at 30 September 2004 was R298.9 million (2003 - R229.9 million). In addition ABIL provides aspiring and established entrepreneurs from previously disadvantaged backgrounds with business opportunities to market African Bank s product range in exclusively demarcated areas across the country through its Entrepreneur Service Points (ESPs). As at 30 September 2004, there were 6 ESPs all of which are owned and managed by PDI entrepreneurs. check credit rating

Consumer education ABIL views consumer rights as essential for promoting access to financial services and accordingly invests in consumer education. improve credit rating

• ABIL won first prize for its outstanding service in Consumer Education in the 2002 National Lender Competition, an annual competition organised by the MFRC. credit online rating report

• African Bank actively promotes the MFRC complaints centre in its branches; credit score rating scale

• African Bank was the first entity that agreed to a service level agreement with the MFRC in terms of resolving complaints; bad card credit credit people

• African Bank was also the first to introduce a policy requirement that MFRC posters (which include telephone contact details) be displayed in all its branches; free credit rating report

• Posters promoting the Office of the Ombudsman for Banking Services ( OBS ) are also displayed; credit rating scale

• African Bank launched a television advertising campaign focused on key MFRC compliance aspects, particularly signing blank documents, and taking out a loan for the right reason; bad credit rating

• Regional offices actively support their local radio stations and offer to talk on air about managing money, personal debt and contractual credit issues, encouraging consumers to know their rights and their obligations; credit rating agency

• African Bank promotes consumer education externally, and internally through the African Bank Consumer Support Desk. This office has as its mandate the protection of the rights of consumers who are clients of African Bank yet its outreach is broader. Its work ranges from promoting consumer awareness through a monthly consumer column, radio interviews on consumer rights, promoting the free services provided by the various Ombuds Schemes, actively supporting Consumer Rights Day on March 15th each year and working with various consumer entities to promote consumer rights in general. In January 2004, the Consumer Support Desk established the African Bank Internal Ombuds Office ( IOO ) where consumers who are unhappy with the service / outcome of complaints are entitled to a second independent review of the complaint. The principles on which the IOO operate are the same as those of the regulators, the MFRC and the OBS. Where the IOO does not accede to the clients view of resolution, the client is then referred to the MFRC or OBS to ensure that they have an independent adjudicated resolution. The IOO abides by all their recommendations; and credit rating canada

• African Bank has been a longstanding campaigner in exposing the violation of consumer rights through the practices of debt administration/mediators who have preyed on consumers in debt, and have in many instances left consumers in real debt crisis. bad credit mortgage rating

ABIL s investment in consumer rights includes the money school initiative. Money school is a life skills enrichment programme for individuals and family units and was developed to redress the issue of debt traps, encourage a saving culture and encourage good personal money management practices. The programme covers topics such as how to control expenditure, how to consider other forms of income, how interest rates work, how to draw up a budget and implement it and how and why to save money. The training is provided free of charge and there is no prerequisite to be a client to attend the course. good credit rating

Procurement and Enterprise Development Strategic intent To direct as far as possible, discretionary procurement at small companies with particular emphasis on the advancement of BEE companies Indicative scorecard The Financial Sector Charter has set targets (50% by 2008), for procurement based on the cost base of financial institutions (excluding non-discretionary costs such as payroll). A total of 15 points have been allocated to this component. A company s score is calculated on the basis of 50c in the rand for black influenced companies (BEE shareholding between 5% and 25.1%), 75c in the rand for black empowered companies (BEE shareholding between 25.1% and 50.1%), 100c in the rand for black empowered companies (BEE shareholding between 50.1% and 100%) and 125c in the rand for black owned companies. credit score rating chart

In ABIL discretionary expenditure constitutes approximately 12% of the operating costs. The bulk of ABIL s costs are made up of non-discretionary costs such as employment and commission costs-42%, telephone and fax costs-6%, depreciation-7% and bank charges-8%. For the financial year ended September 2004, BEE companies were used for over 44% of discretionary spending. credit mortgage rating poor

Empowerment Financing Strategic intent

• To play a meaningful role in those targeted investments that fall within our current business model; and good credit rating score

• To seek innovative ways of fulfilling our BEE financing obligations within the constraints of our current business model. poor credit rating loan

2010 Target Points Actual Points Targeted investments 10% 17 100.0% * * bank credit rating

Annual Investment in low - income housing TBF 0 100.0% * * Annual Investment in agricultural development TBF 0 100.0% * * Annual Investment in transformational infrastructure TBF 0 n/a * * Annual Investment in black SMEs TBF 0 100.0% * * BEE transaction financing 5 * * Total 22 * * All parties to the Financial Sector Charter have committed to working in partnership with Government and its Development Financial Institutions ( DFIs) to mobilise resources for empowerment financing (targeted investments and BEE transaction financing). As part of the process, the parties are still working out: credit card for poor credit

• the desired breakdown between the four components of targeted investments (transformational infrastructure, low-income housing, agriculture development and investments in black SMEs) and BEE transaction financing; business credit rating

• appropriate risk mitigating measures and risk sharing arrangements between Government and its DFIs on the one hand and the private sector on the other; moodys credit rating

• the period over which the empowerment financing will be done; credit card with bad credit

• the institutional framework and financing models for the mobilisation of the various resources; and personal credit rating

• the extent to which and how past empowerment financing transactions will be taken into account. unsecured loan for bad credit

The total amounts to be invested in targeted investments and BEE transaction financing will be calculated with reference to the total designated investments in the financial sector as at 31 December 2003. Total designated investments in the sector are currently estimated to be of the order of R2, 000 billion. The percentage of each institution s designated investments to total financial sector designated investments will constitute the institution s targets for targeted investment and BEE transaction financing respectively. It is estimated that the aggregate amount of new empowerment financing from the financial sector will be at least R125 billion.As at 30 September 2003, ABIL s designated investments figure was R340 million and its financing target is expected to be in the region of R22 million. For the 2004 financial year, ABIL generated new loan sales of R4.4 billion. Based on independent survey, 16% of ABIL s customers borrow for home improvements. Using this figure as proxy would imply that in 2004 ABIL invested at least R700 million in incremental housing. This yields a coverage that is way above the ultimate target for ABIL. credit rating company

Corporate Social Investment Strategic intent To identify and support community investment programmes that have the potential to make a real positive impact to the communities of our customer base Indicative scorecard The African Bank Foundation was launched in 2001 and is the vehicle through which ABIL and its major associates direct a formulated and coordinated programme of social investment according to sound development initiatives. The African Bank Foundation realises that it cannot be all things to all people and thus has deliberately focused on a small basket of activities that it believes will have a positive impact on the lives of those it touches. It supports: canadian credit rating

• formal tertiary education through CIDA City Campus; credit union rating

• the money school initiative corporate credit rating

• education through the arts, crafts and heritage; and credit rating fix

• job creation through crafts. bad credit loan personal

To date since inception, the Foundation has contributed [ ] (2003 -R9, 3m in monetary terms and [ ] worth of in-kind investments to deserving organisations. The Foundation is already spending in excess of the Financial Sector Charter target of 0.5% per year of post-tax operating profits. credit how improve quickly

Ownership and Control Strategic intent fico credit rating

• To identify a strategic long-term BEE partner and to facilitate at least a 10% direct equity ownership by such BEE partner by 2011 improving credit rating

• To ensure significant participation by black people at the executive and board levels of ABIL mortgage credit rating

Ownership 18 * * Direct Ownership 16 Basic points @ 10.00% 12 0.0% * * Bonus points @ 13.75% 0.5 0.0% * * average credit rating

Bonus points @ 17.50% 0.5 0.0% * * Bonus points @ 21.25% 1.5 0.0% Bonus points @ 25.00% 1.5 0.0% * * Indirect Ownership 2 * * Basic points @ 13.75% 0.5 8.4% * * Bonus points @ 21.25% 0.5 0.0% * * Bonus points @ 25.00% 0.5 0.0% * * Bonus points @ * * Control 8 * * Board Black people as % of board 20% - 33% 2 42% * * Black woman as % of board 11% 1 16% * * Executives Black people as % of executives 25% 4 25% * * loan for people with poor

Black woman as % of executives 4% 1 13% * * Total points 26 * * Please note that it would be premature to convert the above figures into points as these figures have not been independently audited for purposes of the FSC. Direct ownership Current status Currently about 26, 000 of the 32, 000 registered shareholders of ABIL are PDIs. These shareholders, hold in aggregate some 500, 000 shares, which constitutes only 0.1% of the total number of shares in issue. bureau credit rating

Proposed equity transaction ABIL is in the final stages of finalising a BEE equity transaction and is now exploring the possibility of raising preference share funding to facilitate the transaction. ABIL expects to announce a deal within the next 6 months. The transaction is largely geared to benefit those PDIs already associated with the group including management and employees. Indirect ownership find credit rating

In January 2003, The BusinessMap Foundation undertook an independent study to estimate black ownership of the South African banking industry. This study estimated that black beneficial ownership based on market capitalization ranged from 12% to 15%. Using this as a proxy on ABIL s 70% local shareholding yields an indirect BEE shareholding range of 8.4% to 10.5%. increase credit rating

Control Board of directors ABIL has already achieved the 2010 targets contained in the Financial Sector Charter. Executives Strategies are in place to improve the % of black people at executive level. Terms and conditions | Disclaimer | Privacy and Security | Access to information African Bank Ltd. is an Authorised Financial Services Provider credit rating uk

Abil s response to the financial sector charter

The Government and Financial Sector signed the Financial Sector Charter in Pretoria on 17 October 2003. The Charter, drafted by the South African financial sector, is a voluntary commitment to Black Economic Empowerment and the expansion of access to financial services to historically under-serviced members of our society. Through its representation on the Banking Council of SA, African Bank was an active participant in the development of the Charter. This has resulted in African Bank forming an integral part of the Banking Industry structures created to design and execute the implementation strategies in the sector, and to meet its obligations in terms of the Charter. free credit rating canada

The following information is provided to understand the implications of the Charter in relation to African Bank: top 1. What is the Charter all about a. It is a document spelling out the plans of the financial sector to redress the imbalances in society, resulting from our racially divided past. b. The document identifies five areas for improvement in terms of economic opportunities for Black people and financial investment (to the estimated value of R125 billion over the next four years). The document anticipates targets for the various categories of distribution of the R125 billion to be achieved by 2008. The five identified areas are: standard poors credit rating

i. Procurement; ii. Access to financial services such as basic banking accounts, savings and investment opportunities, finance for agricultural activities, finance for SME s, and finance for housing; iii. Finance for Black Economic Empowerment transactions; iv. Finance for infrastructural projects; and v. Corporate social investment. c. In addition, the Charter sets specific targets to facilitate improved representivity in staffing, ownership, governance and top management structures of financial institutions, in the following areas: credit rating numbers

i. Human resources development and Employment Equity; Ownership of financial institutions; and Control of financial institutions at the Non-executive, Executive Board and top management levels. d. Performance against targets will be reported in annual reports, as well as to the Charter Council the sector responsible for overseeing the implementation process. e. Performance of each institution will be quantified and measured against a scorecard, and this result will reflect the commitment to, and performance of, the institution in achieving its BEE and services provision targets. credit find fix it rating

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Will the Charter be beneficial to the Group and if so, why ABIL believes that the Charter is a positive commitment by the sector towards the normalisation of SA society and the industry. We are fully committed to this process and will endeavour to meet, and wherever possible, exceed the targets set in the areas relevant to our business. The Charter will be beneficial to the Group as it establishes clear standards and benchmarks to be achieved. It will enable us and our external stakeholders to objectively assess the achievements of the group in respect of BEE, and in providing access to credit for historically disadvantaged individuals. free credit rating score

As a Group we are focused on servicing the Charter s target market and are confident that our rating, in terms of the Charter, will reflect this commitment. 3. What are our obligations in terms of the Charter By voluntarily subscribing to the Charter, we have publicly committed the Group to meeting, or exceeding, the targets set in areas relevant to our business. These are: i. Human Resources Development and Employment Equity. We are already well on our way to achieving these targets, and will apply renewed focus in areas where we fall short. The Charter will require additional investment in the training and development of Black staff. company credit rating

Procurement. We have made some progress and will increase our efforts to achieve the targets. SME finance. Our Commercial Vehicle Finance business, is well placed to exceed the targets in this area. Housing finance for the lower income group. Research shows that historically African Bank loans are frequently used for incremental housing construction and home improvements. Incremental housing construction is of vital importance in improving housing conditions for millions of South Africans and we should easily exceed our targets in this area in the normal course of our business. loan for people with bad

Black Economic Empowerment. Although the financing of corporate activities does not form part of our normal business, we will be expected to make a relatively small contribution (due to our small relative deposit base) to such transactions. The size of such exposures will be insignificant on our balance sheet and we anticipate meeting our target in this respect. fixing credit rating

vi. Corporate Social Investment. The African Bank Foundation is already engaged in social investment activities as required by the Charter. We expect that we will exceed our targets in terms of the Charter. vii. Ownership. Our shareholder profile already reflects significant indirect black ownership as part of our shareholder profile. The Charter, however, sets a target for direct and indirect Black shareholding. Investigations in this regard are ongoing and we have been exploring various options. We are aiming at closing a transaction or transactions that will reflect true, broad-based empowerment, and enhance longer-term shareholder value for the Group s shareholders. credit get rating

viii. Control. The Group already meets, or exceeds, the minimum targets set in the Charter for Board level Black and Black female representation in this area. 4. Will the Charter affect the profitability of the Group The Charter will not have any negative impact on the profitability of the Group. The relevance and legitimacy, and therefore sustainability, of business in the South African context will be enhanced through the achievement of the targets set in the Charter. The Charter is therefore expected to have a long-term beneficial impact on the Group in terms of sustainable growth and profitability. credit online rating

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How will the Charter impact on the Group s employees The Group is already fully committed to Employment Equity and the fast tracking of Black talent development to ensure full representivity of the SA demographics at all levels, and in all areas of the business. The Employment Equity targets set by the Group already exceed the general targets set in the Charter. This is an ongoing process and the Charter should therefore have no new impact on our employees. However, special efforts will be required in areas where we are lagging behind in terms of the required representation. rating bad credit card

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