Post-Barclays, Absa continues to expand its regional footprint, adding new services each year and doing the nuts and bolts of banking well. Given the central role that trade and the flow of cash play in the region, there are few more important awards than that for Africa’s best bank for transaction services – and Absa is a worthy winner.
Well-capitalized and serving more than 12 million customers in 14 markets, Absa offers a full range of services, from foreign currency trade loans to letter of credit refinancing. Its Trade Hub acts as a conduit between local and international banks, and as a single point of contact on all transactions and on all cash flowing into and out of Africa. Key to this is the South African lender’s sprawling network of subsidiaries, regional partner banks and multilateral agency programmes.
The bank was busy in the awards period covering the 12 months to the end of March 2022. British International Investment – formerly CDC Group and the development finance arm of the UK government – added $75 million to its financing facility with Absa. This gives both parties a mechanism to boost trade-finance funding to some of Africa’s most vulnerable countries in key sectors, such as food, agriculture and health, that need it most.
Absa partnered with the African Development Bank (AfDB) on a $250 million risk participation agreement, with the aim of mobilizing more than $2 billion in new trade-related business over a three-year period. The facility’s aims include promoting broad-based economic growth and intra-African trade and regional financial integration, in line with the AfDB’s ‘High 5’ priorities of feeding, powering, industrializing and integrating Africa, and improving the quality of life of citizens.
The programme also enables Absa and Africa’s main multilateral to share the risk of issuing trade-finance facilities to local lenders. Many were left unable to access trade finance support when various multinational banks left the region.
Absa is busy working on a host of other new programmes. It signed up to the International Finance Corporation’s Global Trade Liquidity Programme, committing $250 million to an initiative that brings the knowledge of the private-sector arm of the World Bank to bear in developing markets. This will support access to trade finance in sub-Saharan Africa, particularly in low-income and fragile countries, supporting a vital driver of growth in the post-Covid world.
The bank is also part of the IFC’s Global Trade Finance Programme, which supports cross-border trade and helps countries to generate much-needed foreign exchange via the export and import of goods.
[The award is ] a true testament to our focus on opportunities to evolve in new and innovative ways, building digital platforms that exceed our customer expectations
Thabo Makoko
Thabo Makoko, head of cash management Africa, transactional banking, Absa corporate and investment banking, says the award is “a true testament to our focus on opportunities to evolve in new and innovative ways, building digital platforms that exceed our customer expectations.”
Its Payment Host solution, which offers a raft of services, from reconciliation and bill payment processing to improved liquidity and collection rates, continues to grow in popularity. The solution is on track to be available in all of Absa’s markets by the end of 2022, having been unveiled in six countries, including Kenya, Ghana and Zambia, last year.
Trade Management Online is a secure online banking platform that provides corporate and business banking customers with a wide range of new services. Clients can initiate, receive and manage a full range of trade finance-related products and services via TMO, which uses artificial intelligence and machine learning to cut complexity and costs.
