The Congress of South African Trade Unions on Monday said it was wary of Barclays’ efforts to buy a 60% stake in Absa.
Absa announced on Monday it had received a ”firm offer” from Barclays to buy a 60% stake in the company.
”We are concerned that this is not new investment but the takeover of existing capital, at a big profit to the existing shareholders,” Cosatu spokesperson Paul Notyhawa said in a statement.
”Cosatu will be monitoring very closely to see that Barclays honours its commitments to transformation, in particular to serve the poor and protect and create jobs,” he said.
The union was concerned about five issues: transformation, national goals, jobs, the strength of the rand and banking for the poor.
”The government must ensure that Absa’s new owner, and the rest of the sector, do more to implement all the transformation aims set out in the financial sector charter,” Notyhawa said.
The deal could also undermine the national interest, Notyhawa argued.
”Cosatu is concerned that having such a large part of the banking sector under foreign control could make it easier for capital to be moved out of the country at some future date, with serious consequences.”
Notyhawa said the union was also worried about Absa CEO Steve Booysen’s comment on Monday that two percent of the bank’s workers would be retrenched over four years.
”This will be fought by Cosatu and our affiliate [banking union] Sasbo.
”The new management must be committed to saving and creating jobs, as part of its participation in the transformation of society,” he said.
If the deal led to the strengthening of the rand, this would also be a cause for concern.
”Given that the overvalued rand has already led to a bloodbath of job losses, any further rise would be intolerable,” he said.
The union would continue to campaign for banking to be made accessible to all.
”We shall be insisting that Absa’s new owners co-operate fully in the drive to make banking accessible to the workers and to end the discrimination against the poor,” Notyhawa said.
Banking union Sasbo, however, welcomed the transaction.
”We believe the deal will send positive signals to the rest of the world that South Africa is prepared to open up its economy, provided companies display a commitment towards socio-economic issues in South Africa,” said Ben Venter, deputy general secretary of Sasbo.
Venter said the deal would bring in foreign investment, encourage positive competition in the banking sector and promote the strong growth of Absa in Africa.
Business Unity South Africa (Busa) agreed that the deal would benefit South Africa.
”The magnitude of this banking deal suggests that South Africa may have crossed an important threshold in its capacity to attract more foreign direct investment and to normalise its external financial relationships,” said Raymond Parsons, economic consultant to Busa.
Parsons said the transaction would also place South Africa in a stronger position to continue to rebuild its foreign exchange reserves.
It could also lead to the further liberalisation of exchange controls, he said.
Venter said the union had been assured by the banks that over time the deal would create more job opportunities.
”… some duplication does exist, but bearing in mind the Absa employee attrition rate [12 to 13% per annum] and Barclays’ limited exposure to retail banking, no significant staff reductions are anticipated,” he said. – Sapa