Categories: Banking Reviews

Absa Bank Limited review 2021

Absa Bank known formally as Amalgamated Banks of South Africa was founded in 1991 through a merger of Volkskas, Allied Bank and Sage group.

The group has multiple interests in various countries in Africa. Countries include Ghana, Botswana, Zambia, Uganda, Mozambique, Mauritius, Seychelles and Tanzania.

The group makes over 80 billion Rands in revenue per year. With total assets exceeding R1,4 trillion. The group also employ over 40 000 people and these are permanent staff.

Absa offers financial services in personal and business banking, credit cards, wealth investment management and investment banking.

Absa Group shareholding structure

Shareholders list only include Absa Group majority shareholders.

Shareholder Percentage owned
Schroders Plc 2.92
Barclays Plc 14. 88
Old Mutual 3. 56
Vanguard Group 3
Black Rock 3. 48
Citigroup 3. 01
Public investment corp 6. 53

Absa bank limited services

Personal

Banking

Absa bank accounts: Absa bank offers different bank accounts for different uses.

Accounts issued by the bank are for everyday use {cheque accounts and savings accounts}, accounts with lifestyle benefits, student accounts and accounts for seniors.

All these accounts charge different monthly fees since they are different by usage and purpose.

Credit cards: The bank also has a credit card facility to anyone who qualifies. You get 57 days interest-free when you use your credit card. Also, credit cards come with travel insurance and optional credit card insurance.

Student banking: With Absa personal banking, students, graduates and those under 19 have a banking platform that charges fewer fees.

Youth and students are gifted with free data, discounts and zero fees on accounts. Students get access to study loans whenever needed. Additionally, graduates can apply for overdraft and loans with special preference given.

Islamic banking: Islamic banking is also available at Absa Bank. Transaction accounts, vehicle finance, saving and international banking are all available for Islamic bankers. You can also add a will, although terms and conditions do apply.

Rewards: Bankers can earn rewards from buying groceries, fuel and cashback rewards. You can redeem rewards earned using Absa mobile app, internet banking and WhatsApp banking.

Borrowing or credit

Personal loans: Absa bank offers credit facility that is diversified. With credit options ranging from overdraft, revolving credit and credit card facility.

Amounts to borrow are flexible and range between R500 to R250,000.00. Interest is charged depending on credit score.

Home loans: There are also home loans that are available for individuals. You can get a loan to buy a home to build a home. Home loans can be approved for up to 100% of the home loan value.

Young professionals get up to 30% discount on attorney bond registration plus a takealot voucher to compliment the deal. Repayment for home loans can last up to 30 years depending on how long you want to pay.

Motor vehicle loans: First-time car buyers and car buyers, in general, can borrow with Absa. Whether buying a new or used car, Absa can finance either of the two.

Student loans: Another credit facility is student loan finance. Loans can cover part or some all of your tertiary tuition fees. Absa gives a competitive interest rate on student loans by beating interest offered by competitors.

Insurance

Life cover: Absa bank offer life cover for life, accident and critical illness. Two life cover options are available, namely ultimate protector and instant life.

The ultimate protector covers up to R1,000,000.00 in life and accidental disability cover. Instant life cover, covers up to R6,000,000.00 in life cover, disability and critical illness.

Funeral cover: Absa offers funeral cover with premiums calculated based on your age. The funeral cover, covers for your children, spouse, yourself and extended family.

The funeral cover covers up to R100,000.00 for yourself and spouse. A double accidental claim is applicable to the main member of the life cover.

Car and home cover: with Absa car insurance you get roadside assistance, road guard and home drive.

The home drive is a designated driver service that ensures you arrive home safe from a night out. You get up to six home drives per policy. Roadside assistance is available 24/7 and calls are taken at any time to assist.

Credit card protection – credit card protection covers over disability or dread disease, untimely death and retrenchment.

This protection covers over credit cards, student loans, revolving loans, asset finance and revolving loans.

Travel insurance: with travel insurance you get basic travel insurance that comes with up to 90 days of automatic basic travel insurance and emergency medical cover.

Holders get discounts when traveling as a group such a family or couple.

Savings and Investment

Tax-free and Investment products: tax-free products have limited risks and can invest up to R36,000.00 per tax year and up to R500,000.00 in a lifetime.

A tax-free fixed deposit has a minimum once-off opening fee of R36,000.00 and investment is fixed for a period of 12 months.

Tax-free savings don’t pay tax on interest earned and you can start by depositing R1000, also, you can access your money at any time. Other tax-free savings and Investment accounts are investment and EFT savings account.

Retirement planning: these are investment options that help you plan for your retirement. You can opt to invest in living annuities so that you are financially taken care of monthly after retirement or invest in shares.

Saving for a goal: you can choose to save for a goal at Absa by selecting a product that best suits your savings needs. Products vary with minimum amount to be deposited, deposit frequency and investment duration.

Investing for the future: future investments are categorised according to the level of risk they hold and they are very volatile. From savings accounts to offshore unit trusts these are some of the options that you can choose from.

Business

New business

Starting a business: Absa helps with starting a new business from registration to opening a new business account. The bank helps with creating a business plan and financial ratios that are compatible with third-parties.

Also, knowledge in taxation is shared on which taxes to register for as a business and taxes to register for your employees.

Business accounts: business accounts vary depending on the revenue that the business makes in its financial year.

With a business account from Absa, you get access to the Absa mobile app and internet banking and start banking remotely. Business accounts include those of attorneys, small businesses, enterprises and Islamic businesses.

Business borrowing: Absa finance projects in the agricultural sector including small businesses, corporates and multinational companies. There are also women empowerment loans aiming at advancing the participation of women in business.

Loan amounts that can be borrowed depend on the type of entity that is women involvement and BEE status.

Business investments and savings: Absa offers a savings facility to businesses which include savings account for day to day banking, operating cash and liquidity.

For investments, a company can open a fixed deposit account and have a safe secure investment that the company will have full control over.

Growing a business

Business funding: for an existing business, funding is available for short-term borrowing, asset finance, property finance and debt finance. These loans help businesses to grow from small/medium to large enterprises. Loans are repayable for a period of up to 240 months on property.

Business insurance: every business need to ensure its self from uncertainty and Absa is helping businesses to insure their assets and future.

General business insurance insures against buildings, motor vehicles, plant and machinery. Each business premiums differ, the performance of calculating the actual premiums include but not limited to company history, financial status, company age, company credit risk etc.

International business banking: With international banking, you get import and export solutions that making trading international easy and affordable.

You can make and receive payments in different currencies to different recipients. When travelling abroad you can be able to transact using your Absa business account and access major foreign currencies when you need them.

Special businesses: Absa can help you own grow or transform your business into a franchise. With the help of a consultant you can decide on which franchise to buy or even franchising your business. Other businesses that are given special preference are agribusiness, retail and renewable energy. Absa helps these businesses as they are a key factor in the future economy.

Wealth

Stockbroking

Stock brokers are available to help you trade and invest in savings, shares and other investments. A portfolio management option is available which manage your pool of investments and keeps you alert of every change going on with your investments.

You get to contact a team that is directly in charge of managing your portfolio.

Exchange-traded funds (EFT) facility is available to those who want to invest. If you want to invest in ETFs then you can use Absa to get started as they have a dedicated team that will help every step of the way.

Also, available is a trading facility to trade Forex, commodities and shares. You can choose to trade using 1 of the three currency base which includes GBP, USD and Euro. There are over 30 000 shares and EFTs that can be traded worldwide.

Investment management

This is a platform that allows you to invest both nationally and abroad with your portfolio managed by investment bankers.

The team of investment bankers is available to you when you need them and always give you updates on how your investments are doing.

There are more options to invest in other than investing in the JSE only. You can invest in index funds too. This facility is only available to selected individuals and institutions so there are restrictions.

Social responsibility

Every organisation has a responsibility to serve its stakeholders and Absa provides a service to help organizations play their role efficiently.

Although, Absa’s social responsibility services include enterprise development, financial inclusion, education and skills. The social development is part of their SR services.

Absa bank executives and board members

Executive by name and designation Board members
Aaron Daniel Mminile
CEO
Wendy Elizabeth Lucas – Bull
Jason Quinn
Financial Director
Mohamed Junaid Husain
Michael Harvey
Co-CEO: Corp & Investment Bank
Mark Merson
Charles Russon
CEO : Corp and Investment Bank
Colin Beggs
Bobby Malabie
CEO: Marketing and corporate relations
Alex Darko
Neil Slabbert
COO: Corporate and investment banking
Dhanasagree NNaidoo
Alan Hartdegen
Head: Investor Relations
Jason Quinn
Charles Wheeler
General Counsel

Absa bank, corporate governance

With the help of king IV report Absa Bank has created board committees to ensure good corporate governance. The Absa Bank board came up with 10 committees to assist with discharging its duties. For a big corporation like Absa Bank it is understandable to have so many committees.

List of Absa Bank board committees

  • Directors’ affairs committee
  • Group audit and compliance committee
  • risk and capital management committee
  • remuneration committee
  • Social and ethics committee
  • Information technology committee
  • Board finance committee
  • Credit concentration risk committee
  • Model committee and
  • Separation oversight committee

For insight on how these committes work visit Absa website.

Conclusion

Absa bank has proven to be a banking giant not only in South Africa but in some parts of Africa as well. With the company just being rebranded it is no surprise that people can still relate to the bank and more people are banking with it.

The bank caters for different types of companies and individuals from low-income earners to high-income earners. Absa is a well-rounded bank and provides beyond banking by helping their clients to take the stakeholder inclusive approach.

It seems like Absa is headed in the right direction as there is an increase in the use of technology within the company but slightly behind other major banks in South Africa.

Investment in technology cannot be ignored as competitors are rapidly increasing the use of technology such as FNB and Standard Bank which shut down most of its branches to promote the use of technology.

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Lethabo Ntsoane

Lethabo Ntsoane is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in reviews and financial tips.

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