Standard Bank Group's Tutuwa BBBEE Scheme Reaches Historic Milestone
24 April 2015

Standard Bank Group's BEE Scheme, Tutuwa, has added more than R10.7 billion in wealth to participating individuals, small businesses, communities and strategic partners. A ten year journey reaches a significant milestone for Standard Bank Group, a journey that has seen almost 6 500 individuals and businesses benefit from the transfer of real assets.

More than R10.7 billion of wealth has been created for participants in Standard Bank Group's Tutuwa BBBEE scheme, which passed its ten year lock-in date on 31 December 2014. Beneficiaries of the scheme comprise more than 6 100 current and past Standard Bank Group employees, two broad-based strategic partners, 261 Small Medium and Micro Enterprises (SMMEs) and a community foundation.

The R10.7bn comprises post debt equity value of R8.2bn across the scheme (using a share price of R143.44 at 31 December 2014), and cash distributions in excess of R2.5 billion received by participants over the seven years prior to the lock-in date.

Standard Bank Group's black ownership initiative, Tutuwa, was launched in July 2004 resulting in Standard Bank Group meeting its ownership obligations under the Financial Sector Charter. The Tutuwa BEE consortium consisted of BEE investment companies Safika and Shanduka, the Tutuwa Managers' Trusts comprising then current and future qualifying Standard Bank Group managers, and the Tutuwa Community Trust, which focused on qualifying black SMMEs and community development.

Fred Phaswana, Standard Bank Group Chairman says: "Standard Bank Group believes that the Tutuwa scheme has successfully fulfilled a significant part of Standard Bank Group's commitments under the Financial Sector Charter, by proactively supporting economic transformation in our country, and making a real difference to the lives of historically disadvantaged people.

" In 2004 when the scheme was implemented, Tutuwa was worth R4.2bn with funding of just over R4bn. Upon maturity of the scheme, more than R10.7 billion of wealth has been created for participants in the scheme, allowing them to reinvest this value into the future of their families, their businesses and the economy of South Africa. Aside from creating value for the more than 6100 individual beneficiaries, the 261 SMME businesses, and the two strategic BEE partners, the scheme has added more than R1 billion in tax revenue to National Treasury's coffers.

The beneficiaries of the Tutuwa Managers' Trusts have received cash distributions of R900 million over the life of the scheme; their shares were worth R3.1 billion after debt as at 31 December 2014. These beneficiaries have the option to remain in the scheme for another 5 years, take delivery of shares after settling debt or receive net cash proceeds. The strategic partners continue to be invested in Standard Bank Group.

In 2006, 8.9 million ordinary Standard Bank Group shares were conditionally transferred to 250 qualifying black SMMEs. A number of additional SMMEs have been incorporated into the scheme since then, taking the total to 261 SMMEs at the date of vesting. Collectively, these firms have received cash distributions of R260 million during their participation in the scheme, providing these firms with a buffer against the economic volatility experienced in recent times. This component of the scheme is worth nearly R1.1 billion after debt and the SMMEs have the option of retaining their shares or receiving cash, after debt.

The establishment of the community foundation has recently been approved by the South African Reserve Bank and it will become fully operational later this year.

Says Mr Phaswana: "While Standard Bank Group will continue its transformation journey both in terms of the other pillars of the financial sector scorecard and more generally, we believe we have achieved the objective of transferring real wealth and income producing assets to black hands. This is another example of Standard Bank Group's meaningful contribution to the societies in which we operate.”

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