Finbond Group Limited
Climate Impact & Sustainability Data (2014-03 to 2015-02, 2015-03-01 to 2016-02-29, 2018-03 to 2019-02, 2019-03 to 2020-02)
Reporting Period: 2014-03 to 2015-02
Environmental Metrics
ESG Focus Areas
- Community and Social Responsibility
- Corporate Governance
- Environmental Responsibility
- Employee Well-being
Environmental Achievements
- Reduced carbon footprint through recycling and compliance with environmental legislation
Social Achievements
- Contributed over R810,000 to charitable causes (increase from 2014)
- Provided properties to Tshwane Place of Safety Association (TPOSA) valued at R6 million, saving the charity an estimated R630,000 annually
- Invested in consumer education by distributing "Budget and Save Wisely" and "Know Your Customer Rights" booklets
- Improved Employment Equity scores to become a level 5 BBBEE contributor
Governance Achievements
- Successfully piloted debit card project, with cards being rolled out nationally
- Expanded branch network to 286 branches
- Expanded Compliance, Internal Audit, IT, Human Capital Development, and Risk functions
- Appointed a Chief Business Development Officer
- Received investment grade rating from Global Credit Ratings
- Received a clean bill of health in a Section 5 Review by Ernst & Young
Climate Goals & Targets
Medium-term Goals:
- Increase branch network to approximately 550 branches
- Increase staff numbers to approximately 2,150
- Increase market share in key segments
- Significantly increase net profits through organic growth, strategic acquisitions, and new business lines
- Increase charitable contributions
Short-term Goals:
- Further increase branch network
- Finalise small micro acquisitions
- Conservative organic growth in short-term products
- Increase debit card and transactional banking clients
- Develop customer call centre
- Diversify income streams
- Increase charitable contributions
Environmental Challenges
- Challenging market conditions in the unsecured lending environment
- Subdued growth in the South African economy
- High headline consumer price inflation
- Deteriorating consumer credit risk profiles
- High unemployment rate
- Consumer financial vulnerability
Mitigation Strategies
- Conservative lending practices and strict upfront credit scoring procedures
- Effective collections and increased distribution footprint
- Strong focus on client service
- Conservative approach to risk management
- Strong capital position, significant surplus cash, and robust liquidity profile
- Strict upfront credit scoring and affordability criteria
- Increased capacity in Compliance, Internal Audit, IT, Human Capital Development, and Risk functions
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Standards
Frameworks Used: King III, GRI G4, SDTI
Third-party Assurance: Ernst & Young, KPMG
Reporting Period: 2015-03-01 to 2016-02-29
Environmental Metrics
Total Carbon Emissions:44198 tCO2e/year
Total Energy Consumption:2093 MWh/year
Water Consumption:17500 Kl/year
Waste Generated:5.24 tons/year
ESG Focus Areas
- Corporate Governance
- Community and Social Responsibility
- Environmental Sustainability
Environmental Achievements
- Reduced carbon footprint through environmentally conscious practices and recycling initiatives.
Social Achievements
- Improved Employment Equity score to Level 4 BBBEE contributor.
- Contributed more than R1.7 million to charitable causes.
- Expanded branch network to 344 branches in South Africa, increasing access to financial services in underserved communities.
Governance Achievements
- Complied with King III and Companies Act No. 71 of 2008.
- Implemented a robust risk management framework.
- Established a dedicated and independent compliance function.
Climate Goals & Targets
Long-term Goals:
- Achieve Level 3 BBBEE status by 2018.
Medium-term Goals:
- Converting Finbond’s mutual banking licence to a commercial banking licence.
- Expansion of the South African branch network by 40 branches in high growth areas.
- Bedding down the 91 payday lending branches acquired in North America.
Short-term Goals:
- Further increase the South African branch network.
- Finalise small micro-acquisitions in the 30-day short-term unsecured lending market in South Africa.
- Further increase transactional banking clients.
Environmental Challenges
- Challenging market conditions due to South African Reserve Bank interest rate hikes and worsening economic outlook.
- Increased competition in the short-term unsecured lending market.
- Regulatory changes and potential developments in the financial services industry.
Mitigation Strategies
- Conservative lending practices and strict credit scoring procedures.
- Effective collections strategies and processes.
- Investment in risk management functions and processes.
- Proactive engagement with regulators.
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Standards
Frameworks Used: King III, GRI G4, SDTI
Third-party Assurance: KPMG
Awards & Recognition
- 2015 Sustainability Data Transparency Index awards
Reporting Period: 2018-03 to 2019-02
Environmental Metrics
Total Carbon Emissions:218 tons of CO2e
Total Energy Consumption:10202 MWh
Water Consumption:9781 Kl
Waste Generated:54874 tons
ESG Focus Areas
- Community and Social Responsibility
- Ethics and Corporate Citizenship
- Environmental Sustainability
- Black Economic Empowerment
- Responsible Lending Practices
- Financial Inclusion
Environmental Achievements
- Reduced carbon emissions (quantified data not explicitly provided, but efforts mentioned)
- Increased waste recycling to 72%
Social Achievements
- Increased transactional banking clients by 171%
- Contributed more than R2.1 million to charitable causes
- Provided properties valued at R6.7 million to TPOSA free of charge
- Invested more than R2.4 million in employee training and development
- Increased employee count from 2083 to 2153
Governance Achievements
- Material compliance with King IV principles
- Enhanced corporate governance measures
- 4-star quality rating from Lafferty Group for Finbond Mutual Bank
- Investment grade credit rating affirmation
Climate Goals & Targets
Long-term Goals:
- Grow South African operations through expansion of branch network to approximately 550 branches and increase transactional banking customer base to 1 million active mass market customers and 500,000 Afrikaans customers
- Grow International operations through expansion of store presence in North America and Europe to approximately 800 stores and expand online presence
- Delist Finbond Group Limited from the JSE and separately list the SA and US operations on the JSE and NYSE respectively
- Grow total staff numbers to approximately 3,650
- Grow Net Profits to approximately R800 million to R900 million
- Grow EPS significantly
- Grow NAV
- Increase charitable contributions
Medium-term Goals:
- Grow US$ earnings from a normalized 65% to approximately 80% of net headline earnings in three to five years
- Expand store network in North America to 300 stores
Short-term Goals:
- Add 50,000–100,000 transactional accounts
- Acquire more branches
- Increase charitable contributions in line with profit growth
- Sell a quarter of the property portfolio at a modest profit
Environmental Challenges
- Once-off abnormal fair value adjustment of R129.6 million on investment properties
- Inability to collect from SASSA customers due to new card functionality limitations
- Difficult economic conditions in South Africa
- Potential regulatory changes on credit agreements
- South African SASSA transition issue resulting in a more than 68% reduction in SASSA customer base
Mitigation Strategies
- Increased credit granting criteria, lending to SASSA customers only with active Finbond Mutual Bank accounts
- Recapitalised Finbond Mutual Bank with R40 million
- Stricter upfront credit scoring and affordability criteria
- Monitoring potential regulatory changes and minimizing impact on earnings
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Standards
Frameworks Used: King IV, GRI G4, IFRS, Sustainability Data Transparency Index (SDTI)
Third-party Assurance: SNG Grant Thornton
Awards & Recognition
- 4-star quality award from Lafferty Group
Reporting Period: 2019-03 to 2020-02
Environmental Metrics
Total Carbon Emissions:10,436 tons CO2e
Total Energy Consumption:10,885 MWh
Water Consumption:58,552 Kl
Waste Generated:398 tons
ESG Focus Areas
- Financial Inclusion
- Community Investment
- Corporate Governance
- Employee Development
- Consumer Education
- Environmental Responsibility
Environmental Achievements
- Reduced carbon footprint through recycling initiatives (72% of waste recycled)
Social Achievements
- Contributed over R3.3 million to various charitable causes, including Tshwane Place of Safety Association, Christian Social Council, Compass, Household of Christ, and Woodside Special Care Centre.
- Distributed consumer education booklets in six languages.
- Increased transactional banking customers by 27.1%.
Governance Achievements
- Material compliance with King IV principles.
- Investment grade credit rating affirmation from Global Credit Ratings.
Climate Goals & Targets
Medium-term Goals:
- Delist from JSE and relist South African and North American operations separately.
- Potentially sell South African operations to focus on North America.
Short-term Goals:
- Further improve efficiencies in North American branches.
- Expand international operations through acquisitions in North America and Europe.
- Expand Americash Loans online lending.
Environmental Challenges
- Transition of SASSA customers to the South African Post Office card negatively impacted South African operations.
- COVID-19 pandemic and resulting lockdowns significantly impacted business volumes (70% down in South Africa, 50% down in North America in April 2020).
Mitigation Strategies
- Implemented several initiatives to support employees and clients during the COVID-19 pandemic.
- Performed stress tests to assess the impact of COVID-19 on liquidity, capital adequacy, and cash.
- Implemented cost-saving initiatives.
- Conservative lending practices, strict upfront credit scoring, and effective collections mitigated credit risk.
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Standards
Frameworks Used: King IV, GRI G4, SDTI (Sustainability Data Transparency Index)
Third-party Assurance: BDO Inc.
Awards & Recognition
- 4-star quality rating from Lafferty Group for Finbond Mutual Bank