Johannesburg, Tuesday, 14 March 2017 – Today FirstRand CEO, Johan Burger, presented to the
Standing Committee on Finance and Portfolio Committee on Trade and Industry. The presentation
formed part of a series of public hearings convened by Parliament to assess progress in the
transformation of the financial services sector.

FirstRand, which represents FNB, RMB, WesBank and Ashburton Investments, provided the
committees with a detailed submission, supported by a 15-minute presentation, which outlined
progress the group has made against the framework set down by the Financial Services Charter
namely: ownership, management and control; employment equity; enterprise and supplier
development; empowerment financing; social development; and corporate and social investment.

After the presentation Burger commented that he welcomed the opportunity for healthy dialogue.

“Hopefully we have demonstrated to the committees that FirstRand takes transformation and
inclusiveness extremely seriously, and that we continue to make good progress,” he said.
“We acknowledge that there is still much more to do, but hopefully the information contained
in our submission and presentation will address any concerns that we are not fully committed
to creating an equal and sustainable society.”

Burger started his presentation with a brief overview of a bank’s role in facilitating economic activity,

emphasising that FirstRand was the custodian of R952 billion of deposits, representing the

savings pool of eight million customers.

“It’s important to recognise the banking sector is a national asset for the country
and integral to the South African economy,” he commented.

Burger went on to explain that FirstRand understood its role in ensuring a sustainable future for the
country and that transformation and inclusion were key imperatives for the group.

Dealing with the ownership imperative, Burger said that the FirstRand BEE deal resulted in

R23.5 billion of value transfer to a broad base of black shareholders including communities,

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staff and its strategic partners, WDB, KTI and MIC. When applying the FSC guidelines, FirstRand’s

black ownership amounts to 36.5% of the group, which Burger said represented a real

commitment to transformation.

Progress in employment equity manifested in the fact that 76% of the group’s employees were ACI

with 87% of all new graduates now black. Burger acknowledged that transformation
at top and senior management was still too slow and more work was needed. The group’s board,

however, which is ultimately the custodian for all shareholders, was 52% ACI.

Burger shared some meaningful data with the committees in order to demonstrate the group’s efforts

to facilitate economic inclusion and wealth creation. For example, RMB has provided funding of
R53 billion for transformational infrastructure in support of Government’s National Development
Plan and R36 billion of funding for BEE transactions.

The group’s procurement spend with black-owned businesses had shown good growth and from 2012

to 2016 the group‘s cumulative spend with black-owned suppliers exceeded
R10 billion.

In terms of empowerment funding and enterprise development, WesBank had so far invested

R3.5 billion in financing to the SA taxi industry, and FNB and WesBank

combined had provided R8.3 billion financing to black SMEs.

“This data proves that we have absolutely put our balance sheet to work
to facilitate the creation of jobs and build capacity,” said Burger.

Turning to inclusivity for individuals through access to financial services, Burger said that banks had
an unparalleled set of tools that have already demonstrably been put to work. These included granting
credit to buy a house or car or fund a student loan, the provision of cheap and accessible channels to
transact, pay bills and send money home.

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By way of example, he confirmed that FNB was providing free transactional access
through its eWallet product for 3.2 million South Africans and had committed R10
billion to affordable housing.

“The banking industry in total, through leveraging its scale and innovation,
now reaches 80% of South African households in LSMs 1 to 5,” confirmed Burger.

FirstRand has also created two of the largest CSI vehicles in South Africa. The FirstRand

Empowerment Foundation was created through the group’s BEE transaction; it is black
controlled and at R6 billion is one of the largest endowments in the country. In addition,
the FirstRand Foundation, which was created in 1998 when the group was formed, represents

contributions from FirstRand of R1.7 billion. The two foundations provide R460 million of
funding to social initiatives per annum, with a specific focus on education.

Summing up, Burger said that he acknowledged that growth in profits and returns had been created
for the group’s shareholders on the back of these initiatives, but that a commercially sound and
profitable banking system remained a non-negotiable for the country.

“Examples from around the world have demonstrated the devastation that results from
banking crises: job losses, recession and social unrest have all played out
throughout the world following the global financial crisis,” he warned.

“Maintaining a sound banking system whilst driving transformation and inclusivity
are fundamentally complimentary objectives and the achievement of the latter
will continue to accelerate on the back of a strong economy”.
The full submission is available on the group’s website:


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