Nedbank’s innovative bonus-share scheme for black retail clients, introduced as part of the Nedbank group’s black economic empowerment (BEE) transaction, opened to the public on Monday.
Nedbank is the first bank to include clients as beneficiaries in a BEE transaction.
The Nedbank Eyethu Ownership Plan, as the scheme is known, will see eligible clients receiving one bonus share for every three Nedbank shares they buy, provided they retain their primary banking account with Nedbank for a minimum period of 36 months. A further benefit to clients is that their original investment is guaranteed.
According to Clive van Horen, MD of Nedbank Retail Banking Services, the Nedbank Eyethu Ownership Plan has attracted a great deal of interest since it was first announced on April 19 this year.
“As there is no industry precedent, it is difficult to predict what the actual uptake will be but we are encouraged by the numerous enquiries we have received from prospective applicants,” he says.
A special call centre has been set up to deal with enquiries, and clients will also be able to obtain more information and application forms from Nedbank branches.
“We see this as an opportunity to extend existing partnerships with black clients and to reach out to potential new clients. We want to demonstrate that Nedbank is serious about transforming itself into a bank for all South Africans.
“We are also committed to delivering an empowerment transaction which is genuinely broad-based and true to the objectives of BEE,” says Van Horen.
The Nedbank Eyethu Ownership Plan closes on November 15 this year.
The deal is part of a bigger BEE deal that will see 11,5% of Nedbank’s South African operations become black-owned through the issue of 41,3-million new Nedbank ordinary shares.
“One of the Nedbank group’s strategies is to focus and grow its black retail client base. The Nedbank group identified the BEE transaction as an opportunity in its pursuit of this objective.
“The company therefore allocated an aggregate of R708-million-worth of the new Nedbank Group Limited ordinary shares issued in terms of the BEE transaction for the exclusive benefit of existing and new black retail clients of the Nedbank group throughout South Africa.
“Existing and new black retail clients of the Nedbank group will be entitled to apply to participate in the BEE transaction through the Nedbank Eyethu Ownership Plan, which is to be implemented through this offer for subscription,” the group stated on Monday. — I-Net Bridge