FirstRand Bank Limited
Status: Approved investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
FirstRand Bank is one of the leading financial institutions in South Africa. It has three separately branded divisions in South Africa: First National Bank for retail and commercial banking, Rand Merchant Bank for corporate and investment banking, and WesBank, the largest vehicle finance provider in the country.
What is our funding objective?
FMO and DEG (Lead Arranger) jointly provide USD100mln in funding as part of a syndicated long-term senior loan. FMO's USD50mln will be used to fund underserved MSMEs, renewable energy and climate change adaptation projects South Africa.
Why do we fund this investment?
FirstRand Bank is a longstanding relationship of FMO. FirstRand’s purpose is to build a future of shared prosperity, i.e. intentionally using its core business activities, including its role in allocating capital to the economy, to add value to society – profitably and at scale. The alignment of values in view of Impact and climate makes FirstRand Bank an ideal co-operation partner. The proceeds of this facility will be utilized to assist the funding needs of MSMEs, more specially within the systemically important agricultural and renewable energy sectors with FNB. The funding supports FirstRand Bank, one of the country’s largest employers, to provide funding for MSMEs which could assist in facilitating job creation and also to design a private sector contribution to a just energy transition in South Africa. The transaction contributes to the Sustainable Development Goals, in particular SDGs 8, 10 and 13.
What is the Environmental and Social categorization rationale?
FRB is classified as FI-A since the bank has a high exposure in absolute terms to high-risk sectors (outstanding exposure to high-risk long-term loans & project finance as well as to IFC PS Triggered Transactions). The high E&S risk portfolio is can mainly be found in the RMB business line (25% of the group’s loan book) which represents the bank’s activities in the corporate and investment banking segments in South Africa, the African continent and India. High E&S risk corporate client sector exposures include the chemical industry, upstream oil and gas, mining, and agribusiness. FRB has a well-functioning ESMS which is broadly aligned with EDFI Harmonized E&S Requirements (including incorporation of applicable IFC Performance Standards) and operated by a team of E&S professionals. FirstRand Bank is a front-runner in sustainability on the continent. The bank is a signatory to the Equator Principles since 2009 and a founding member to the development of the Principles for Responsible Banking.
More investments
| Date | Total FMO financing |
|---|---|
| 8/4/2020 | USD 75.00 MLN |
| 11/15/2018 | USD 50.00 MLN |
- Website customer/investment
- https://www.firstrand.co.za/the-group/about-firstrand/
- Region
- Africa
- Country
- South Africa
- Sector
- Financial Institutions
- Publication date
- 1/23/2024
- Effective date
- 11/21/2023
- Total FMO financing
- USD 50.00 MLN
- Funding
- FMO NV
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - A