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Cape Town – Transformation in the financial services sector – especially ownership and management control – is not at the required level, according to Liso Steto, acting chief director of Black Economic Empowerment at the Department of Trade and Industry (DTI).
At a joint meeting of the portfolio committee on trade and industry and the standing committee on finance, stakeholders in the financial services sector have been invited to make submissions about transformation in the industry. This includes input on deracialisation, high monopoly levels and progress on the implementation of the Financial Sector Charter.
Steto was part of a delegation from the DTI who spoke about amendments to the financial services sector code.
He said the financial services sector in South Africa includes more than 30 banks as well as non-banking financial institutions such as state-owned developmental finance institutions, short- and long-term insurance companies and smaller financial intermediaries.
The sector manages more than R8trn in assets and contributes 21.6% of SA’s gross domestic product annually and contributes over 15% of corporate income tax. It’s also one of the fastest growing employers in SA, with more than 250 000 employees in the sector.
Broad-based black economic empowerment (BBBEE) codes are a means to address factors that hinder transformation within a specific sector, Steto said.
The scorecard of the financial services sector is different from other scorecards as it’s highly regulated by systems, such as Basel III. The overall ownership target in the sector is 25%, the DTI said.
It is proposed that African people must be prioritised for top and senior management positions in the sector.
