Several of the large banks in South Africa have pitched in to help customers deal with the impact of the coronavirus pandemic. Standard Bank has announced a second wave of relief for people earning R7,500 or less providing them with a three-month instalment relief after a payment holiday had been offered for SMEs and full-time students last week. It comes into effect at the end of the month. Absa Bank has announced similar measures with short-term liquidity relief for credit products and Absa said the programme will not attract additional administration fees. Absa said support to corporate and business banking clients would entail solutions based on their unique requirements and operations. FirstRand has in addition to what it is doing for customers, offering instalment cashflow relief; announced a private-public venture to help the medical effort in the fight against the coronavirus. R100m has been allocated for Spire, an initiative established by the bank to scale up critical care capacity in South Africa. FirstRand COO Mary Vilakazi told Alec Hogg that Spire had already funded 100,000 test kits. – Linda van Tilburg
As we’ve just heard from China, the public private partnerships are working very well and helping China to get over its challenge or war against Covid-19. In South Africa we’re seeing something very similar and leading the way is FirstRand who’s Chief Operating Officer – Mary Vilakazi – joins us now. R100m that you’ve dedicated for this pandemic intervention and relief effort. Mary, was there a lot of debate to get this through at a group level?
Good morning Alec and thank you very much for inviting us onto your show. The R100m was raised in consultation and in collaboration with our foundation – the FirstRand Foundation – as well as our client facing brands, FNB well known for the “How can you how can I help you” tag line, as well as RMB and the West Bank teams. FirstRand is known for the philosophy of owner management where employees are fully empowered to make a real contribution and they are accountable – we see that in the high levels of commitment that we’ve seen in the last two weeks where people have worked tirelessly to make sure that they’re still delivering the best results for customers, society, shareholders and each other. So basically the FirstRand Spire initiative was born and initiated by staff who wanted to make sure that – in addition to what they are doing for customers – that we are responding to the social challenges that we know the health system is going to face as well as other societal impacts that are going to come down the line. So yes, it wasn’t difficult to get the committed team of people that are working on the initiative, as well as our foundations, FNB, Westbank and RMB to put together the R100m that they’ve pledged to date.
The objective is that you’re going to support where it’s needed in the medical side – in other words?
That’s correct. We started with the Spire initiative 2 weeks ago so this was before the president announced the lockdown and the Solidarity Response Fund that he alluded to in the speech, We had already been organising with the intention of leveraging client relationships our committed stuff and some of the networks that we have in the various industries. We are really just organising ourselves to be able to support government and its partners in mitigating the impact of the covered 19 crisis rapidly and at scale. I suppose it’s because we know that we can we are able to move quite fast. We leverage our payment systems, we leverage our governance system forums – that are already in place – so even when the president announced the solidarity response effort, what we did is we reached out to the Solidarity Fund and said we already had Spy to be able to respond quite quickly to the challenges and we would basically like to make sure that they see this as the pledge to the Solidarity national effort. So yeah. Our key focus is being able to move quickly, our team has been quite agile and also being able to quickly bring scale. We welcome everybody else to come on board and support where that’s necessary, we are there to support Solidarity as well, but I think we can see by the traction that we’ve gained in the last week in what we have enabled the South African public health system.
Yeah. And today’s a big day because your testing kits arrive 100,000 of them.
Correct. These testing kids were ordered by by Right To Care. So Right To Care is a nonprofit organisation and they had actually ordered 10,000 kits by themselves. They believed that these kits would make a big impact in South Africa. They are currently being used in France and in Germany and they funded the initial 10000 kits for testing out of their own reserves. I think it shows you the level of commitment that everybody is bringing to the table. So they actually ordered 100,000 kids at risk – that’s about $1.5m with the intent and hope that a fund is going to come along. When we got to know about it and got to appreciate the economics – because it’s a lot more economical with the tests that they have and they’re quite quick as well – we were interested and we came on board to enable the arrival of the100000 kits. So yeah we are hoping that the authorities will vet them and authorised them as well as good testers that can be deployed wider and hopefully we will be able to partner with them going forward. We also hope other donors will will come forward and support them as well.
Mary, 100,000 kits. That suggests there are going to be a lot of people who are going to need testing and we know at the moment we’re only sitting at about 2,000 confirmed cases, what is your modelling telling you to have made that kind of a commitment? Thats R20m, it’s not small change.
No it’s not small change and I guess the numbers change all the time as more confirmed cases come in, but we think that at the peak – sometime towards the end of April – that they’ll be about a 100,000 kits that we probably need in South Africa. We heard last week that people have left Gauteng to go to various provinces. We think that we’ll get to the peak in about 3 weeks when of a lot of people will require testing, provided we observe what we need to in the lockdown. So yeah. So we think peak time is end of April.
So that’s R20m of the R100m, where are the other R80m going?
As of last night, working with the Solidarity Fund, we’ve agreed on doing 2 things. The one we’ve agreed to provide them with working capital to enable them to access PPE – protective personal equipment for the frontline staff. We will provide the working capital facility and a portion of the facility will also be at risk. So this is the money that will be used to get equipment for the frontline staff – masks in particular. So there’s an imminent order of about 5 million masks that are coming – that’s about a R25m commitment from our side – so we think that’s going to make a big difference. One of the things that we continue to hear, is anxiety by medical professionals who don’t have masks. That’s a basic, there’s far more that they need, hence we have availed the working capital facility for Solidarity to place orders and get going. That’s just the normal way of how we would provide funding solutions but we’re also prepared to be at risk for a portion of that facility. So it’s testing kits that we’re prioritising and the next thing that we’ve been looking at is ventilators. The numbers on the ventilators range from R3,000 to R5,000 depending on whether the ventilators are in a good working condition or not. We’ve done quite a bit of work in this space and we’ve also come to appreciate that before people go to ICU, there’s a lot of other assisted breathing equipment that they can access. So from when you go into the ambulance and they help you with a form of ventilator or people that walk around with oxygen, all that equipment is actually quite necessary to help people with breathing before they deteriorate and need to be in ICU for ventilators. So we are working on sourcing some of that equipment through our networks and we think will play a huge role. We’ll know over the course of the week where we stand with that.
How many of those respirators or ventilators are you going to be ordering? I’m trying to get a sense of how big this thing could be.
When I asked the question, because bankers are also learning how the health industry works, how government procurement works as well as the treatments, my understanding is that in the country there are about 50 of those portable ventilators. The work that we are doing to understand is whether we know if these orders will be suitable and they’ll be approved by the authorities. We are looking at a number of 200 of those units.
So those would be units that presumably would be mobile, could go out to where people are and when they get brought in from the ambulance it would give them that golden hour that the medical people talk about.
Correct. A couple of days actually before they need ventilators which we know we have a shortage of.
You said the R100m so far, are you expecting that there’ll be more money that FirstRand will be allocating to fight Covid-19
That’s a good question because that’s really what we would like to have. We have also received requests from other companies to work closely with and they’re particularly interested in how we are able to scale and move quickly, they would also like to contribute. We are very clear that this is not in competition to any of the other initiatives. So we welcome people to support if you think that what we are doing is adding value, so we’ve got a few of those people and organisations who have reached out to us. We recently released a report to society giving feedback of what the FirstRand Foundations have enabled. So I think if run out of the R00m, I’m sure we will be able to make a request to the various partners to come on board. At this point in time, there’s no further commitments, but if we have deployed the funds that we currently have, in a way that our partners are comfortable with I am quite sure that we can scale this up.
