The first of what Absa says are many benefits in store for its private banking and affluent clients as a result of the acquisition of a majority stake in the South African group by British banking group Barclays in July this year were revealed on Wednesday.
Absa announced that it is launching the first two offerings in a series of joint lifestyle solutions — Destination UK and the Celebratory Investment Series.
Destination UK is a sterling current account supported by a debit card, an overdraft and a credit card, and requires a salary to be paid into the account on arrival in the United Kingdom. With Destination UK, it will be as if the Absa and Barclays client will already have a relationship on arrival in the UK.
It makes setting up a new bank account quick and easy — something that can be done even before clients pack their bags and board the plane. It also gives them access to a range of other services that can take care of their other financial needs, including advice on how to make the most of their tax status while living in the UK.
The Celebratory Investment Series is a five-year linked-endowment policy that offers investors the opportunity to participate in the South African and/or global equity markets with a known minimum return while ensuring capital protection and tax-efficient returns.
The Celebratory Investment Series offers two options: the Onshore Enhanced Investment and the Offshore Enhanced Investment.
The Onshore Enhanced Investment offers a South African investment denominated in rand and requires a minimum investment amount of R50 000.
Investors can expect a minimum guaranteed after tax return of 15% on the gross initial investment and a 90% of the return on the FTSE/JSE Top 40 index over the investment term.
The Offshore Enhanced Investment offers investors a foreign investment denominated in pound sterling. It requires a minimum investment of £5 000 and offers a market leading after tax return of 8% sterling on the gross initial investment.
The Offshore Enhanced Investment offers equity participation linked to the following equally weighted basket of international indices: the UK’s FTSE 100, North America’s S&P 500, Europe’s Eurostoxx 50 and Japan’s Nikkei 225.
“These are the first tangible benefits to our customers of the partnership with Barclays,” says Steve Booysen, Absa chief executive. “One of the key drivers of the partnership with Barclays is that our clients would be able to leverage off Barclays’ global expertise, and this is just the beginning. The Barclays transaction allows Absa to now offer premium services and best-of-breed products in-house.”
“These offerings are targeted specifically at meeting the needs of individuals wanting to invest offshore, as well as South Africans who spend extended periods of time working and living abroad and who need easy access to banking services in the UK.
“This is for the person who needs a familiar place, a home away from home, where they can get the advice and solutions they are accustomed to,” says Zarina Bassa, Absa executive director of private banking.
“Our research outlined our clients and the market’s need for offshore solutions, from both a banking and an investment perspective. We have been working very closely with our colleagues at Barclays to bring these first fruits of our relationship to our clients.
“Barclays’ offshore expertise, particularly in investment and asset management, together with their experience in offshore markets forms, is integral to my intention to establish the biggest and best private bank in South Africa,” says Bassa.
Absa intends to offer a full offshore banking and investment proposition to its clients. Absa clients will thus be able to use their local Absa relationship to manage their local as well as their global banking and investment portfolios. The offerings introduced are merely an indication of some of the benefits this partnership holds and will be followed by a number of savings and other solutions in the near future. — I-Net Bridge