Latest news with #Absa
Zawya
10 hours ago
- Business
- Zawya
South Africa's top banks pass first climate stress test but data gaps identified
JOHANNESBURG - South Africa's six systematically important banks passed the central bank's inaugural climate-risk stress test, but the exercise exposed some modelling shortfalls as institutions had not fully embedded climate-risk indicators into their frameworks, a financial stability review showed. The gaps could mask longer-term losses. The review is the central bank's bi-annual report on the health and resilience of the country's financial system. The latest edition was released on Thursday. The six banks, Absa, Capitec, FirstRand , Investec, Nedbank and Standard Bank of South Africa, used climate-scenario frameworks from the Network for Greening the Financial System (NGFS) to model potential losses on their climate-sensitive loans. The NGFS is a global coalition of central banks and supervisors. About one-third of bank books sit in the most exposed sectors to climate change namely real estate, household lending and transport. "There were different challenges in each organization so its hard to make broad-based recommendations," said Vafa Anvari, divisional head of macro financial vulnerabilities in the Financial Stability Department of the central bank. "We were working with the six largest banks on how they intended to close these gaps going forward and we were quite comfortable with what they indicated they will be doing in the next couple of years to close these gaps. "(Since) this was the first exercise of its kind in South Africa, you expect to shake the trees and see what falls out and in that context it was very illuminating." Earlier this month torrential rains and gale-force winds inundated South Africa's Eastern Cape province, triggering property and business-interruption claims.
IOL News
11 hours ago
- Business
- IOL News
Court criticises Absa's bookkeeping after bank fails to recover R6. 7 million
In 2021, Absa and Gola Trading and Projects signed a business loan, secured by a mortgage bond of R5.6 million and supported by personal guarantees from Arandana and Tswane Refineries. Image: Absa/Facebook Absa has lost a bid to attach property after it claimed that this was the best way to recover some R6.7 million it said was owed to it by two companies and Authar Arandana after they allegedly defaulted on a loan. In dismissing the dispute over the multimillion-rand business loan, the South Gauteng High Court in Johannesburg was scathing in its judgement about the reliability of Absa's books. 'In any event, it seems clear to me that… it is evident the bookkeeping of the plaintiff was in disarray.' The Judge, N.S. Kruger, said this conclusion was based on a review of communication between Absa as plaintiffs and defendants Gola Trading and Projects, Arandana, and Tswane Refineries. Kruger also considered 'various conflicting loan statements'. Kruger said in the recent judgement that 'it seems that as far as [Absa] is concerned, the one hand is unaware of what the other is doing. In my view the defendants have succeeded in raising triable issues [matters that can be defended] in these respects'. In 2021, Absa and Gola Trading and Projects signed a business loan, secured by a mortgage bond of R5.6 million and supported by personal guarantees from Arandana and Tswane Refineries. The contract's date is in dispute, having been signed in either February or October 2021, but the court noted its structure and obligations are not. The loan included a capital facility of R5.535m, fees and VAT, and an additional amount for interest and potential legal costs. According to the Absa, by mid-2023, Gola Trading and Projects had defaulted on payments, falling five instalments behind, which was more than R430 000. This, Absa claims, triggered a contractual clause allowing the loan to be cancelled and the full balance, of more than R5.27 million, to be called in immediately. But the defendants contest this, saying no such arrears existed. They point to a series of loan statements showing lower arrears and argue that subsequent payments – including two of R90,000 and a larger one of over R194,000 – brought the account into a credit position. By 10 October 2023, they received a statement showing that no arrears were owed. Despite this, Absa continued to chase the money, later adjusting the alleged arrears to R312,000 and seeking summary judgment. The amount claimed was later revised again to R4.27 million, which the judge said raised further questions. The defendants argued that this pattern of inconsistencies undermines Absa's certificate of balance and suggested a material dispute that should be tested at trial. Among the errors cited was an apparent reference to a '2019 agreement' in the bank's court papers – something Absa later admitted was a drafting mistake, the judgment noted. There were also discrepancies in the bank's internal calculations, leading to conflicting figures across statements and correspondence, the judge said. The defendants argued that, even if the loan was technically in arrears at one point, Absa's subsequent conduct, accepting payments and requesting further instalments, effectively reinstated the contract. They assert that no formal notice of breach was served before the alleged cancellation, and that the bank's changing demands demonstrate the agreement was still in place. Adding to the complexity, the third defendant has since gone into voluntary liquidation. Absa has postponed its claim against this party, focusing instead on recovering funds from Arandana and Gola Trading and Projects, and seeking a court order to declare the mortgaged property executable. However, this matter will now have to be settled through mediation. IOL
IOL News
a day ago
- Business
- IOL News
Absa Manufacturing Survey reveals decline in business confidence amid economic challenges
The Q2 2025 Absa Manufacturing Survey indicated that the Business confidence declined marginally to 33 points, down from 34 in Q1, an outcome some noted could have been significantly worse given prevailing conditions. Manufacturing business confidence dipped in the second quarter amid domestic and global uncertainty. This was revealed in the second quarter 2025 Absa Manufacturing Survey. Business confidence declined marginally to 33 points, down from 34 in quarter one, an outcome some noted could have been significantly worse given prevailing conditions. The manufacturing survey was conducted by the Bureau for Economic Research (BER) drawing insights from approximately 700 manufacturing businesses. Economists have echoed similar sentiments The confidence index ranges from 0 (no confidence) to 100 (extreme confidence). Absa said domestically, manufacturers also faced several challenges. These included subdued product demand, rising electricity tariffs and water supply disruptions – particularly in Gauteng, compounding to the sector's strain. Sachin Chanderdhev, a sector specialist for the Manufacturing Sector at Absa Business Banking said during the survey period, gross domestic product (GDP) forecast downgrades, the evolving Budget 2.0/3.0 and political tension within the Government of National Unity contributed to heightened local uncertainty. 'Internationally, geopolitical concerns also persisted, notwithstanding the high-profile White House engagement between South Africa and the United States,' Chanderdhev said. Domestic and export sales deteriorated sharply, falling by 22 and 32 points, respectively. Similarly, new domestic and export orders dropped by 25 and 35 points, indicating sustained demand-side pressure amid constrained consumer purchasing power. Survey indicators - tracking sectoral constraints including insufficient demand, political uncertainty and skilled labour shortages - also worsened during the period. Transport, capital and chemicals subsectors were the main contributors to the overall drop in sentiment. Notably, confidence in the Transport subsector declined steeply to 3 points, down from 27 in quarter one, which Chanderdhev suggested may reflect concern around US tariff increases and uncertainty regarding the continuity of multinational production operations in South Africa. Conversely, the furniture and metals & glass subsectors recorded confidence gains of 16 and 9 points, respectively. The latest indicators follow a two-point decline in quarter one, indicating that the manufacturing sector remained under pressure in the first half of 2025 as demand remains constrained. Gross value added by the South African manufacturing sector declined by -2% quarter-on-quarter in the first quarter, following a 1.1% contraction in quarter four. Waldo Krugell, an economics professor at North-West University, said the survey shows some really worrying numbers indicating weak demand and local and international uncertainty. 'My worry is that this again means low investment and no economic growth. The recent GDP numbers showed that if investment in machinery and equipment is excluded, private investment is now 30% lower than before the Covid pandemic," said Krugell. "There is not much that South Africa can do about real wars and trade wars elsewhere, but it is clear that we need more certainty and a lot more speed with the reforms that are underway in SA.' He said a drop of confidence in the transport sector is telling of too slow progress being made at Transnet. North West University Business School economist Professor Raymond Parsons said the Absa survey again confirms that South Africa's economic recovery is slow and uneven. 'Whilst the manufacturing sector outlook remains uncertain, retail sales in April, on the other hand, were strong. The Absa survey is a further reflection of the extent to which global and domestic uncertainty is still hampering SA's incipient economic recovery in a key business sector, Parsons said. "It emphasises why the hesitant economic upturn needs maximum policy support.' Efficient group chief economist Dawie Roodt said, 'It is clear the confidence in the broader economy is not what it is supposed to be. When we talk about manufacturing what has been happening in South Africa for many decades is we are having deindustrialisation, which means we are closing down factories.' Professor Bonke Dumisa, an independent economic analyst, said unfortunately the manufacturing sector has been negatively affected globally. 'There are significant global market jitters because of the US tariff wars. It is against this background that manufacturing, mining, and other sectors have been so negatively affected.' BUSINESS REPORT
IOL News
3 days ago
- Business
- IOL News
Pretoria High Court rules Sarb, PA acted unlawfully in blocking Sipho Pityana's Absa chair appointment
A recent ruling by the Pretoria High Court has upheld Sipho Pityana's challenge against the South African Reserve Bank, raising critical questions about the legitimacy of regulatory practices and corporate governance in South Africa Image: File The Pretoria High Court determined that the South African Reserve Bank (Sarb) and its Prudential Authority (PA) acted outside the bounds of the law in their objections to Sipho Pityana's appointment as chair of Absa Bank in 2021. Pityana sought a declaratory order asserting that Sarb's conduct was unlawful, arguing that their informal interventions breached established legal protocols. According to the legal papers served to the PA, the authority halted his chairmanship bid by conducting an informal process that involved consultation with third parties, including former Absa CEO Maria Ramos, to assess his suitability for the role. The PA's concerns emerged after Absa's succession committee identified Pityana as the sole candidate to succeed Wendy Lucas Bull, who was set to resign in March 2022. In an unexpected move, Absa ultimately appointed Sello Moloko as chairperson instead. This situation escalated as discussions regarding Pityana's appointment took place outside the formal procedures laid out in the Banks Act, raising serious questions about adherence to the guidelines governing banking appointments. Having joined the Absa board in 2019 and elevated to lead independent director by June 2020, Pityana's career faced a turbulent shift following his resignation from AngloGold Ashanti in December 2020 amidst allegations of sexual harassment, which he has adamantly denied. This earlier controversy resurfaced when Absa dismissed him from its board, claiming he breached his duties as a director by filing suit against the PA. In 2021, the Absa Group and Absa Bank Boards removed Pityana from their ranks, stripping him of his position as lead independent director and chair of the remuneration committee. Judge Flatela Luleka, in a compelling judgement, emphasised that there was no credible evidence countering Pityana's claim of being in line for the chairperson role at Absa. 'I conclude that [Pityana] was poised to be nominated for the chairperson position of Absa. There does not appear to be any credible evidence before me to gainsay this position,' Judge Luleka stated. Furthermore, the judge acknowledged that the matter raised significant legal issues of public importance, necessitating the court's adjudication. 'The relief sought by the applicant is justified,' he pronounced. Neither Sarb nor the PA were available for comment following the ruling, and attempts to reach Pityana went unanswered. Pityana's legal struggle, however, extends beyond this recent decision; he is also contesting his removal from the Absa board through separate legal avenues. He contends that the result of his current application could set important precedents for governance and illuminate the relationship between the PA and banking institutions in South Africa. In concluding the matter, the court affirmed its status as one of public significance, with potential implications for future governance structures—a reminder of the tightrope that regulatory bodies must walk in overseeing corporate leadership. This article was originally published in Business Report IOL
IOL News
3 days ago
- Business
- IOL News
Pretoria High Court rules Sarb, PA acted unlawfully in blocking Sipho Pityana's Absa chair appointment
A recent ruling by the Pretoria High Court has upheld Sipho Pityana's challenge against the South African Reserve Bank, raising critical questions about the legitimacy of regulatory practices and corporate governance in South Africa Image: File The Pretoria High Court determined that the South African Reserve Bank (Sarb) and its Prudential Authority (PA) acted outside the bounds of the law in their objections to Sipho Pityana's appointment as chair of Absa Bank in 2021. Pityana sought a declaratory order asserting that Sarb's conduct was unlawful, arguing that their informal interventions breached established legal protocols. According to the legal papers served to the PA, the authority halted his chairmanship bid by conducting an informal process that involved consultation with third parties, including former Absa CEO Maria Ramos, to assess his suitability for the role. The PA's concerns emerged after Absa's succession committee identified Pityana as the sole candidate to succeed Wendy Lucas Bull, who was set to resign in March 2022. In an unexpected move, Absa ultimately appointed Sello Moloko as chairperson instead. This situation escalated as discussions regarding Pityana's appointment took place outside the formal procedures laid out in the Banks Act, raising serious questions about adherence to the guidelines governing banking appointments. Having joined the Absa board in 2019 and elevated to lead independent director by June 2020, Pityana's career faced a turbulent shift following his resignation from AngloGold Ashanti in December 2020 amidst allegations of sexual harassment, which he has adamantly denied. This earlier controversy resurfaced when Absa dismissed him from its board, claiming he breached his duties as a director by filing suit against the PA. In 2021, the Absa Group and Absa Bank Boards removed Pityana from their ranks, stripping him of his position as lead independent director and chair of the remuneration committee. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Judge Flatela Luleka, in a compelling judgement, emphasised that there was no credible evidence countering Pityana's claim of being in line for the chairperson role at Absa. 'I conclude that [Pityana] was poised to be nominated for the chairperson position of Absa. There does not appear to be any credible evidence before me to gainsay this position,' Judge Luleka stated. Furthermore, the judge acknowledged that the matter raised significant legal issues of public importance, necessitating the court's adjudication. 'The relief sought by the applicant is justified,' he pronounced. Neither Sarb nor the PA were available for comment following the ruling, and attempts to reach Pityana went unanswered. Pityana's legal struggle, however, extends beyond this recent decision; he is also contesting his removal from the Absa board through separate legal avenues. He contends that the result of his current application could set important precedents for governance and illuminate the relationship between the PA and banking institutions in South Africa. In concluding the matter, the court affirmed its status as one of public significance, with potential implications for future governance structures—a reminder of the tightrope that regulatory bodies must walk in overseeing corporate leadership. This article was originally published in Business Report IOL
