Standard Bank Group concluded its BEE ownership transaction, Tutuwa, in October 2004. This resulted in 10% direct ownership of our South African operations by the Tutuwa BEE consortium. The Tutuwa scheme encompassed Tutuwa Managers’ Trusts for current and former black managers of SBSA, the Tutuwa Community Trust focused on black SMEs and community development, and empowerment partners Safika and Shanduka. At December 2014, we had approximately 6 100 black beneficiaries of the managers’ trusts, and 261 black SMEs participating in the initiative.
The Tutuwa initiative’s 10-year lock-in period ended on 31 December 2014. We introduced beneficiary engagement programmes during 2014 to inform beneficiaries of their options in terms of selling their shares and provide them with the necessary financial education to make sound financial decisions. Tutuwa Plus was implemented to ensure the sustainability of the black SME beneficiaries in our Tutuwa initiative beyond the vesting of their shares. The programme assists these businesses in making sound investment choices and will provide for ongoing business advisory support following the SMEs’ exit from the initiative. Standard Bank
Tutuwa has created R10,7 billion in value for 6 100 current and former Standard Bank employees, 261 black-owned small businesses, and two empowerment partners, while also establishing a foundation to support education and youth initiatives. Each of the small business beneficiaries will receive a direct benefit of between R2 million and R3 million, allowing them to grow their businesses, employ more people and contribute to the overall prosperity of South Africa.
Now that the lock-in period is over, and to the extent that beneficiaries exercise their right to sell some or all of their shares, black ownership of the bank is likely to reduce in the short to medium term. This is because selling at least some shares after 10 years of participation in the scheme would be a natural choice for some beneficiaries. Standard Bank believes that the right of beneficiaries to fully and freely access the value inherent in their shares in a manner of their choosing is very important as a pillar of empowerment.
While Standard Bank will continue its transformation journey both in terms of the other pillars of the financial sector scorecard and more generally, we are confident that we have complied in full in respect of ownership. Having reviewed the level of black ownership in Standard Bank and bearing in mind the pressing need for transformation to be as broad-based as possible, we have concluded that the positive effects of employing our capital to lend into the wider economy – and particularly in support of transformational infrastructure and enterpris edevelopment – will yield a far greater benefit to South Africa than a second empowerment deal structured along the lines of Tutuwa.