Absa Wins R3 Trillion GEPF Custody Mandate From Standard Bank, Lifting H1 Earnings 8%
Updated
Updated · businessday.co.za · Aug 21
Absa Wins R3 Trillion GEPF Custody Mandate From Standard Bank, Lifting H1 Earnings 8%
3 articles · Updated · businessday.co.za · Aug 21
Summary
Absa secured custody services for the Government Employees Pension Fund, taking over a mandate Standard Bank had held since 1996 and gaining the country’s biggest pension-fund custody contract.
The win gives Absa control over safekeeping and administration of more than R3 trillion in GEPF assets, while the Public Investment Corporation remains responsible for managing the underlying portfolio.
CEO Kenny Fihla cast the contract as proof Absa can land larger transactional-banking and structural-deals mandates after hiring new talent to strengthen those capabilities.
Absa reported first-half headline earnings up 8% to R12.8 billion, with South African earnings rising 17% to R9.2 billion and offsetting a 10% decline in its other African operations.
The mandate positions Absa to chase more custody business as it targets faster growth, even as it warns the global economic outlook remains uncertain and sees South Africa growing 1.5% this year.
Will Absa's new custodial role actually prevent the controversial unlisted investment losses that have previously haunted Africa's largest pension fund?
Could migrating R3.5 trillion in assets from a 30-year custodian expose South African pensioners to unprecedented systemic risks?
With benefit payments still heavily delayed, does changing the asset custodian offer any real relief to frustrated government pensioners?