Banks continued to meet many of the empowerment and transformation targets set in the Financial Sector Code (FSC), despite the severe economic contraction of -6,4% experienced in 2020, which reduced opportunities for job creation and inclusive economic growth.
Until the South African economy recovers from the years of state capture, maladministration, political uncertainty and a lack of urgent economic reforms, sustainable Black Economic Empowerment (BEE) will be hampered. Banks however remained committed to meeting and exceeding the transformation targets set out in the FSC. In 2020:
The findings of the Transformation in Banking Report, show in hard numbers, that the narrative that banks are falling far short of their FSC targets is based on an incorrect interpretation of the numbers as guided by the FSC. This can distort facts and discredit the contribution of banks to the transformation of the financial services sector and economic empowerment in South Africa.
Banks are acutely aware that South Africans who face increasing daily economic hardships are growing impatient with calls for responsible, sustainable reforms that seem to do little to improve their lives. The faster implementation of announced economic reforms will create more opportunities for transformation and empowerment in the economy, which will be supported by the banking industry. Banks will continue to work with government and business to fast-track inclusive economic growth. The FSC itself makes the point that “the stability and soundness of the financial sector and its capacity to facilitate domestic and international commerce is central to the successful implementation of broad-based BEE”.
This report also demonstrates how banks and other financial institutions have been central to transformation in the energy sector by financing the Renewable Energy Independent Power Producers Programme (REIPPP). With the right conditions in place and an enabling regulatory framework, banks can play a similar transformative role in other sectors of the economy, which will achieve much beyond the targets set out in the FSC.