| Tue 18 Apr 2006, 7:30 | | Absa Bank Limited - Abridged Pre-Listing Statement |
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ASA
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Absa Bank Limited - Abridged Pre-Listing Statement
ABSA BANK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/004794/06)
(JSE share code ABSP)
(ISIN: ZAE000079810)
(`Absa Bank" or "the Company")
ABRIDGED PRE-LISTING STATEMENT
THIS ABRIDGED PRE-LISTING STATEMENT IS NOT AN INVITATION TO THE PUBLIC TO
SUBSCRIBE FOR ABSA BANK PREFERENCE SHARES BUT HAS BEEN PREPARED FOR THE
PURPOSES OF PROVIDING INFORMATION ON THE ABSA BANK PREFERENCE SHARES AND ON
ABSA BANK IN TERMS OF THE LISTINGS REQUIREMENTS OF THE JSE LIMITED
1. INTRODUCTION
The board of directors of Absa Bank has resolved to raise between R2,5 billion
and R3 billion in equity through the private placement ("the private
placement") of between 2 500 000 and 3 000 000 non-cumulative, non-redeemable
preference shares in Absa Bank ("Absa Bank preference shares") with a par value
of R0,01 each at a subscription price of R1 000,00 per Absa Bank preference
share.
2. RATIONALE
Absa Bank wishes to raise cost-effective permanent share capital as part of a
general capital management programme and to provide Absa Bank with funding for
strategic initiatives. More specifically, the proceeds of the private
placement, which will qualify as regulatory primary capital, will enable Absa
Bank to:
- fund continuing internal growth; and
- fund external growth, including to partly fund Absa Group Limited"s
("Absa Group") proposed acquisition of Barclays sub-Saharan African operations.
3. LISTING ON THE JSE LIMITED ("THE JSE")
The JSE has granted Absa Bank a listing of between 2 500 000 and 3 000 000 Absa
Bank preference shares, as follows:
JSE sector: "Preference Shares - Preference Shares"
Abbreviated name: Absa Bank - P
JSE share code: ABSP
ISIN: ZAE000079810
The listing is subject to the conditions that Absa Bank meets the requirements
of the JSE in respect of the requisite spread of Absa Bank preference
shareholders, being a minimum of 50 preference shareholders, collectively
holding at least 20% of Absa Bank preference shares, excluding non-public
preference shareholders, as defined in paragraph 4.25 of the Listings
Requirements of the JSE and that the application form attached to the
Pre-listing Statement is countersigned by Absa Bank. The JSE has agreed that
the directors of Absa Bank have the right to increase the number of Absa Bank
preference shares from 2 500 000 to 3 000 000, thereby raising up to R3 billion
in equity, provided that an acceptable placing price be achieved at the
book-build auction on the closing date of the private placement, Thursday, 20
April 2006.
4. INFORMATION RELATING TO ABSA BANK
Absa Bank was incorporated in Pretoria, South Africa, on 6 November 1986 under
the name United Building Society Limited. United Building Society Limited
changed its name to United Bank Limited with effect from 8 April 1991 and from
United Bank Limited to Absa Bank Limited with effect from 26 September 1991.
Absa Bank is a wholly-owned subsidiary of Absa Group, one of the largest
banking and financial services groups in South Africa. Absa Group had assets of
R407 billion at 31 December 2005 (R347 billion at 31 March 2005). Absa Group
provides a wide range of banking and financial services. Banking products and
other financial services are provided through separate Absa Group subsidiaries.
Absa Bank and its subsidiaries" (the "Group") contribution to Absa Group"s
headline earnings was in excess of 70% for the nine months ended 31 December
2005.
4.1 Group structure as at 31 December 2005
See press
4.2 Nature of business
Absa Bank is a leading provider of banking services in South Africa. Absa
Bank"s major businesses or divisions are described in more detail below.
Retail banking
Absa Bank"s retail banking segment consists of a number of segment- and
product-focused business units.
Segment-focused business units
High net worth and affluent market: Absa Private Bank
Middle market segment: Retail Banking Services
Mass market segment: Flexi Banking Services (including UB Micro Loans
Limited)
Small business market: Small Business
Product-focused business units
Home loans: Absa Home Loans (including Repossessed Assets)
Credit cards: Absa Card
Absa Private Bank aims to deliver holistic financial solutions, sourced
internally as well as externally to Absa Bank via specialist providers to
targeted markets.
This will be delivered by way of appropriately qualified private / personal
bankers supported by a team of specialists including financial planners and
offshore product specialists. Furthermore, Absa Private Bank aims to create and
preserve wealth for affluent and high net worth customers by ensuring that
appropriate financial advice is given. Absa Private Bank caters for individual
and professional business practices.
Retail Banking Services is a leading financial services provider in the South
African middle market. This market typically constitutes individuals earning
between R60 000 and R500 000 per annum and includes semi-skilled to
professional individuals within this range. Services and offerings encompass a
full life stage approach from youth to retirement and embrace various
socio-economic dynamics in the South African market. Suitable offerings are
supported by a relevant channel mix, such as branch, telephone and internet,
with interactions ranging from personal to call centre based.
Flexi Banking Services ("FBS") is entrenching itself in the lower income
segment of the market by building a clear understanding of its customers, their
needs and the business environment. This understanding is enabling FBS to
develop compelling value propositions for targeted segments and deliver
affordable and appropriate financial and lifestyle products and services to the
lower income segments of the market. Products currently available include
transactional, savings, credit and insurance products. Pricing is competitive
and affordable as a result of innovative cost optimisation strategies and
efficient business processes. Products and services are offered through an
extensive footprint and a choice of multi-channels.
Small Business provides financial products and services to businesses with an
annual turnover of less than R10 million per annum across all business sectors
with the exception of the public sector.
Absa Home Loans offers innovative residential property-related ownership
solutions to Absa Bank"s target market segments. The product is offered through
Absa Bank"s internal channels (branch, telephone and internet) as well as
external intermediaries (such as estate agents, mortgage originators and lead
generators).
Repossessed Assets is responsible for the disposal of assets that come into
Absa Bank"s possession as a result of defaulting loans.
Absa Card provides global card acceptance, electronic payment and financial
solutions through excellent service in selected market segments. Services are
distributed by means of Absa Bank"s branch network, corporate and business
bankers, over the internet and by direct sales. Product users include
individuals and businesses from small and medium enterprises to corporates.
Commercial banking
Commercial banking consists of the provision of banking services and
solutioning to medium- to large-sized business enterprises and vehicle and
asset financing to all market segments.
Segment-focused business unit
Business Banking: Business Banking Services
Product-focused business unit
Vehicle and Asset financing: Absa Vehicle and Asset Finance
Business Banking Services ("BBS") offer a wide spectrum of commercial banking
products and services ranging from off-the-shelf offerings for transactional
business to complex financial solutions to meet sophisticated customer
requirements.
Relationship management is used to serve BBS"s customers through business
centres for large businesses and business cells for medium businesses. BBS is
active in commercial property finance, debtor financing, agribusiness, public
sector, franchising and consumables.
Absa Vehicle and Asset Finance ("AVAF") offers customised vehicle and asset
finance products (ranging from the financing of manufacturing and mining
equipment, to leases, to office automation, to the financing of private
vehicles) and services to customers in the corporate, commercial and personal
markets. AVAF also offers movable asset management solutions (such as fleet
managed maintenance) to the above-mentioned markets. With the aim of being the
asset finance solution provider of first choice in its chosen markets, AVAF
offers a multi-channel approach. Electronic capturing / application and
delivery remain a strategic focus to enhance customer experience. Channels
include Absa Bank branches and business centres, approved motor dealers,
contact centres and the internet.
Wholesale banking
Domestic operations - Wholesale banking: Absa Corporate and Merchant Bank
Absa Corporate and Merchant Bank ("ACMB") provides integrated banking solutions
to the corporate and institutional market segments involving sophisticated
banking systems, complex financing and risk management structures, and
cutting-edge advisory skills. The division also provides specialist products
and services to the Group. These include international documentary and foreign
exchange, merchant banking and corporate finance services and support. The
division also undertakes the wholesale funding and pricing of deposit products
in the Group.
ACMB"s geographic focus is primarily on South Africa. There is also a specific
focus on trade-related activities in Africa.
Customers are served through an industry- and customer-focused relationship and
value-enhancing approach. This is supported by specialist product solutions and
ongoing transactional and operational banking offerings.
ACMB has segmented its market into a number of industry segments:
being financial; resources; transport, construction and allied;
telecommunication, media and technology; consumer goods and services; and black
economic empowerment.
Other activities
In addition to the banking services described above, Absa Bank has various
support functions that are managed on an Absa Group-wide basis owing to Absa
Bank being a wholly-owned subsidiary of Absa Group. These divisions focus on
assisting business units to achieve their goals and objectives while ensuring
continued alignment with the Company"s corporate and financial strategies.
Full names Age Qualifications Business Address
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