ABSA Group Limited
("ABSA")
SHARE CODE: ASA
ISIN CODE: ZAE000013389
Transaction with ICL regarding ABSA's Internet offering
In accordance with the requirements of paragraph 3.4(b) of the listing
requirements, the following should be noted:
ABSA has taken a strategic decision to accelerate the implementation of its
e-business strategy to capitalise on the success achieved so far. The key
thrust of the acceleration strategy will be on improving value offerings
through the Internet, service and cost benefits through a focus on the
utilisation of infrastructure and the launch of an imaginative Internet
consumer initiative.
The first step in the acceleration programme is a transaction with ICL
(South Africa) in terms of which ABSA will enjoy a full relationship with
free internet subscribers instead of dealing through affinity Internet (Pty)
Ltd to further develop the bank's free internet access proposition.
The financial implications of the above developments on ABSA are set out
below.
The incremental cost to ABSA is not expected to be material for the
2001/2002 financial year. Not taken into account is the value of new
business generated from the free Internet access and the sustainable
benefits flowing from the enhancement of the ABSA brand. The value of new
business generated from free Internet access is evident in the 37% rise in
new Internet banking clients and an average increase of R1,2 billion in
online transactions per month since the launch in February 2001.
The terms of the contract with ICL are favourable and the costs are well
contained within ABSA's current e-business budget. Details of the unit cost
to ABSA per subscriber of the ICL arrangement is competitive sensitive
information and has accordingly not been provided.
In conclusion, ABSA is of the view that the financial effect of above
developments on the group's 2001/2002 earnings will be neutral.
11 September 2001
Sponsor
Merrill Lynch SA (Pty) Limited
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