Discovery was born as a modern South African financial services business and we take pride in our purpose and the impact that we've had on the lives of our clients, advisers and other sectors of society; we are accountable and our responsibility to always do the right thing, with absolute integrity, is core to our values. We are also proud to be a nation–builder and positive force within society – we will be investing over R12bn in South Africa over the next 10 years and see this as an investment in the future of our nation. Therefore, to encounter any negativity, particularly from our clients is especially painful; even more so, to be branded as disloyal to our clients, the very people we serve every single day, is not only hurtful, it is absolutely false. The entire basis of each of Discovery's businesses is a "shared value" model which is founded on us giving more to our clients than we take and it is fundamentally based on partnership, respect and care for our clients.
It's also important to state the facts simply:
- the launch of Discovery Bank presents a unique opportunity to build a new, uniquely positive Bank that offers the best interest rates, technology and rewards. It has the potential to disrupt for the benefit of all of its clients.
- the South African Reserve Bank has a clear transformation mandate and part of the licensing process of Discovery Bank was a commitment to a 10% direct BEE shareholding. While this was a requirement for the license it is also consistent with other banks and the broader transformation need which it is incumbent upon us to support.
- BEE can either be achieved through a corporate or narrow grouping of individuals, or it can be broad–based with reach. Our preference is the latter, with broader social and economic benefits.
- this is not a free Scheme. Participants would need to pay for their shares and meet the conditions of the Scheme over the term;
- vendor financing would be available to assist participants but it would be interest bearing and comprehensive utilisation of the Discovery Bank products would be a key condition. The shares would not be tradable and the Scheme is therefore based on the participants generating value for the Bank over an extended period. The participants would contribute to the building of the Bank – and it would ultimately benefit all Bank clients if it is successful.
The rationale of the BBBEE Scheme can therefore be summarised as: a requirement of the Discovery Bank license, broad in reach, requiring payment and active participation in the Bank. Far from being a handout, we believe that this is an appropriate structure that is based on the value generated by the participants in order to meet a national transformation objective.
Having said all this, we are listening to the feedback. I have spoken to many clients and advisers, and while without exception they are all supportive based on the facts, it is also clear that some clients believe that we have ignored them. Nothing could be further from the truth. We are engaging extensively with individuals and organisations and will continue to do so – to explain the rationale of the Scheme but also to listen to all views and to incorporate all legitimate feedback. We don't profess to have perfect solutions, but we will always listen and work hard to improve. This applies even more–so to advisers. The relationships with our advisers go back decades in many instances – we have grown together – and go beyond business. We are truly appreciative of the support and the fundamental belief that we will always act with integrity and do the right thing.