South Africa's banks vow to be 25 per cent black-owned by 2010

By MAX GEBHARDT

JOHANNESBURG - South Africa's banks and financial institutions have committed themselves to being at least 25 per cent black owned by 2010.

This means at least R50 billion ($12 billion) in assets must be in black hands within the next seven years. At least 10 per cent of the 25 per cent needs to be direct control, and the other 15 per cent indirect control. The country's banks, insurance companies and financial institutions are currently valued at R200 billion.

The commitment from the banks to speed up the process of black economic empowerment forms part of the financial services charter, which was unveiled by finance minister Trevor Manuel in Pretoria on Friday.

"The charter takes forward the notions of empowerment in a way I personally find very satisfying," said Manuel. "There is a new benchmark."

A year in the making, the charter aims to transform the financial services sector as part of the government's broader black economic empowerment aims. It will seek to address not only imbalances in ownership but also employment equity, procurement and access to banking services for black South Africans.

The financial sector has also committed itself to providing about R75 billion for empowerment financing.

The charter will run until the end of December 2014 and each financial institution will have to publish an annual report on its progress.

The companies have agreed that by 2008 they will have:

* 20-25 per cent black representation at senior management level (four per cent of whom must be black women),

* 30 per cent at middle management level (10 per cent must be black women),

* 40-50 per cent black at junior level (11 per cent black women)

* At least 33 per cent representation of black people at board level.

One bank chief executive said that while the employment equity targets were achievable, they would be a tough ask. He felt that attrition levels of whites at senior levels in the bank might need to be accelerated to achieve some of the targets.

While the charter is voluntary and there are no penalties for companies that don't meet the targets, Manuel did point out that the government could use the threat of losing government contracts to force companies to comply.

- INDEPENDENT NEWSPAPERS (SOUTH AFRICA)