THE rumblings about the need to start a black-owned bank began last year, as if such an entity has never existed in SA. To remind those who might have forgotten, not only have there been several in the past, but such a bank does exist — it is situated in Sunninghill and simply needs capital to be able to grow.
One day a foreign investor or some big private equity player will grab it and people will complain after the fact about how black South Africans lost out on another opportunity to build a black-owned bank.
The entity I am referring to is a small bank, Ubank, which is led by credible black executives with wide banking experience, such as Luthando Vutula and Madoda Petros. The last time I checked the bank’s annual report, its board also featured other respected people, such as Sango Ntsaluba.
It, therefore, does not seem like an entity that will fold tomorrow.
Ubank, previously Teba Bank, is owned by a trust managed by the Chamber of Mines and the National Union of Mineworkers.
It caters largely for the mining community and understands the financial needs of black workers.
Ubank is not the only banking opportunity out there; there are many others staring us in the face. Another one to look at would be Barclays Africa, previously known as Absa Group. I believe Barclays Africa’s parent in London (Barclays Plc) is considering the reduction of its 62% shareholding in the Johannesburg-headquartered banking group.
In my experience as a journalist, I have learnt that large corporations do not take kindly to false rumours and are quick to issue statements rebutting those that are not true. But neither Barclays Plc nor Barclays Africa have done so since the rumours started circulating.
Should Barclays Plc put a deal on the table, there is an opportunity for black business groups, some of which have accumulated billions of rand in capital in the past two decades, to club together and acquire a significant stake in Absa and Barclays Africa’s eight other operations in Africa.
But this would require big black capital to take the plunge and acquire a significant holding.
It would mean black capital adopting the modus operandi of Afrikaners. Businessmen such as Christo Wiese, Markus Jooste, Jannie Mouton and several others co-invest to create a big dream and do not compete.
Creating a big black-owned bank or grabbing a sizeable chunk of Barclays Africa would equally mean that wealthy black businessmen would have to club together and shed any idea of wanting to compete with each other. There are many of these black dollar millionaires in SA.
The Public Investment Corporation (PIC) could also consider warehousing a portion of the stake for the black consortium. There is nothing scandalous about that.
Those who bothered to read what the then Public Debt Commissioner (predecessor to the PIC) did to prop up the Afrikaner community should have no qualms at all if Dan Matjila were to set aside some capital to help build a black bank.
On top of the resources available to the PIC, perhaps Sanlam could consider taking back what it has sold and acquire a portion of Barclays Africa.
When Barclays acquired a 55% stake in Absa more than 10 years ago for $5.5bn, the Canary Wharf-based bank bought the shares from Sanlam, Remgro and a number of minorities. Sanlam continues to be a significant shareholder in Barclays Africa, with a stake valued at more than R2bn the last time I looked.
You are probably wondering where black investors might fit into this? Patrice Motsepe’s Ubuntu-Botho is a key strategic partner of Sanlam and the two parties have started co-investing as Motsepe prepares to fulfil an ambition of creating a black-controlled financial services empire. Ubuntu-Botho could consider co-investing with Sanlam in Barclays Africa if there is a deal on the table.
Grabbing Absa operations would also reclaim Meeg Bank, a black-owned institution that was sold to Absa Group.
It is never too late to build a sizeable black-owned bank. It is false to say the market is saturated and, therefore, the horse has bolted. Look at what Capitec has achieved, and it was started only at the turn of the millennium. Discovery is also working on the banking licence process with the South African Reserve Bank. Finbond, one of the new growing banks in SA, only started rolling out transactional banking two years ago, and Sasfin is now on the same path.
A big black-owned bank has to be different. It has to understand the deep financial needs and conditions of many black people. It cannot simply operate in the same way as the existing banks. That sizeable black-owned bank will have to understand things such as lending to people who have assets, but no title deeds.
It will have to be prepared to promote financial inclusion in a manner that is not divorced from the way many black people live, especially in rural areas.
It must recognise that the wealth of many black people is in the form of livestock, and help communities leverage off assets that continue to be largely unrecognised.
The bank will have to offer a broader set of savings products and not oversell funeral cover to the black communities. Black people want to save too and crave products that have good returns. They want to know about equity and bond markets — they do not want to be restricted to the 32-day deposit account.
• Ndzamela is finance writer