Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003) Industry Charters Financial Services  Charter Code Series FS600: The Measurement of the Enterprise Development and/or Empowerment Financing Element of Broad-Based Black Economic Empowerment Statement 602: The Measurement of the Empowerment Financing and Enterprise Development Element for Measured Entities that are not exempted from contributing towards Empowerment Financing 2. The Scorecards

 

 

 

 

(IBA members will be responsible for R1.6bn of the R80bn increment)

 

With respect to the local banks, the target will be measured as total balance sheet exposure for new loans written from 1 January 2012 to 31 December 2017 and is in addition to the amounts held on their balance sheet as at 31 December 2011. For scoring purposes, it shall be deemed that local banks held R0 as at 1 January 2012.

 

Illustrative Example (local banks):

 

Bank A has achieved R30bn of balance sheet exposure for Targeted Investments as at 31 December 2011. Bank A's portion of the new target is R40bn additional Targeted Investments exposure from 1 January 2012 to 31 December 2017. Therefore, its reporting target shall be R70bn in total.

 

From 1 January 2012 to 31 December 2013 it has written new qualifying loans to the value of R5bn and the balance sheet exposure relating to this R5bn as at 31 December 2013 is R3bn.

 

With respect to calculating its score as at 31 December 2013, Bank A shall take R33bn, being its R30bn historic performance plus its R3bn current performance divided by its target of R70bn. The quotient multiplied by the total points available shall be the points that Bank A may claim as at 31 December 2013.

 

The formula is as follows:

 

A = (B/C) x D

 

Where:

 

A is the points recognised

 

B is the sum of the historic performance and the current performance

 

C is the target and

 

D is the total points available

 

A = [(R30bn + R3bn) / R70bn] x 12

A = 5.66 points

 

Illustrative Example (IBA members):

 

Bank A has achieved R50m of balance sheet exposure for Targeted Investments as at 31 December 2011. Bank A's portion of the new target is R10m additional Targeted Investments exposure from 1 January 2012 till 31 December 2017. Therefore, its target shall be R60bn actual balance sheet exposure as at 31 December 2017.

 

As at 31 December 2013 Bank A has a total of R52m qualifying exposure on its balance sheet.

 

With respect to calculating its score as at 31 December 2013, Bank A shall take its actual R52m qualifying exposure divided by its target of R60m. The quotient multiplied by the total points available shall be the points that Bank A may claim as at 3 December 2013.

 

The formula is as follows:

 

A = (B/C) x D

 

Where:

 

A is the points recognised;

 

B is the actual balance sheet exposure at measurement date;

 

C is the target; and

 

D is the total points available.

 

A = R52m/R60bn x 12

A = 10.4 points

 

To avoid any doubt, the target for the banking sector is based on an increment of R80bn additional Empowerment Financing between 1 January 2012 and 31 December 2017. Local banks will be responsible for R78.4bn of the increment and IBA members will be responsible for R16bn of the increment.

 

 

 

With respect to the long term insurance sector the target shall be measured as total balance sheet exposure at the measurement date and includes all current balances held.

 

To avoid any doubt, the target for long term insurers is based on an increment of R17bn additional Empowerment Financing between 1 January 2012 and 31 December 2017.

 

Illustrative Example (Long Term Insurers):

 

Insurer A has achieved R1 bn of balance sheet exposure for Targeted Investments as at 31 December 2011. A's portion of the R27bn target is R2bn, Targeted Investments exposure as at 31 December 2017.

 

As at 31 December 2013, A has a total of R1.2bn qualifying exposure on its balance sheet, comprised of its R1bn prior balance and R0.2bn new loans.

 

With respect to calculating its score as at 31 December 2013, A will take its actual R1.2bn qualifying exposure divided by its target of R3bn. The quotient multiplied by the total points available shall be the points that A may claim as at 31 December 2013.

 

The formula is as follows:

 

A = (B/C) x D

 

Where:

 

A is the points recognised;

 

B is the actual balance sheet exposure at measurement date;

 

C is the target; and

 

D is the total points available

 

A = R1.2bn/R3bn x 12

A = 4.8 points