Discovery Bank’s “no whites” share plan under fire

Trade union Solidarity has launched a campaign against Discovery Bank’s share plan where black clients will receive 10% of the shares in the bank.

Discovery Bank was officially unveiled in November 2018, offering a completely digital banking service with products designed to improve the money management of clients.

Discovery CEO Adrian Gore described the new venture as the world’s first “behavioural bank”, which will reward clients for healthy life choices and good financial decisions.

Some of these benefits include dynamic interest rates and “fantastic discounts” with Discovery’s commercial partners.

As part of its value proposition, Discovery Bank will give black depositors 10% equity in the business without any cost or risk to them.

Gore admitted that there is some political risk here because the plan excludes white customers, but said they are convinced it is a good thing to do.

“We need to consult broadly and understand it deeply. We feel strongly with deep conviction that it is a good thing to do,” he said.

Solidarity disagrees with Discovery

Solidarity does not share Gore’s views, arguing that Discovery Bank “doesn’t want to reward people according to their behaviour alone, but also according to their race”.

“Black clients will receive 10% of the shares in the bank because they are black and white clients won’t receive 10% of the shares in the bank because they are white,” Solidarity said.

“White South Africans have helped build Discovery as much as any other group has. Yet, Discovery is saying that its white clients have lower worth.”

“When two clients whose financial situation is exactly the same walk through the bank’s doors, the black client is worth more simply because he is black.”

Campaign launched against Discovery’s “no whites” share plan

Solidarity said a special website, SMSs, and WhatsApp, Facebook, and Twitter campaigns will be used to exert pressure on Discovery to make their empowerment plan inclusive.

The union’s Facebook campaign encourages its members to “make their voice heard against Discovery’s race plan” and “Vote No”.

The union has also put up a billboard on the N1 highway to encourage people to stay away from Discovery Bank.

The billboard simply states “Discovery Bank #StemNee” (Vote No) with the Solidarity branding at the bottom.

Discovery explains

Discovery said it has noted Solidarity’s petition against Discovery Bank’s BBBEE Scheme.

“Discovery is a deeply patriotic and values driven organisation and we have committed to investing over R13 billion into South Africa over the next five years. The Bank is central to this,” Discovery said.

“It is well known that businesses and qualifying companies are required by law to comply with the statutory provisions of Broad-Based Black Economic Empowerment.”

The company added that the financial services sector has committed itself to fulfilling the spirit of BEE.

It said there is both a clear moral imperative and statutory requirement for transformation in our society.

“It is also vital that we comply with one of our key banking license conditions, as agreed with the South African Reserve Bank, to incorporate BEE in the structure of Discovery Bank and we aim to achieve this in a truly empowering and broad-based way,” Discovery said.

It explained that its primary goal is to build a bank that is progressive, nation building and rewarding for its customers.

“We will be inviting people from diverse groups to join the Bank and have been consulting broadly on the most appropriate structure of the BBBEE Scheme – we have also taken feedback from our clients and key stakeholders into account,” the company said.

“We are in the process of finalising the details and participation rules of the scheme, which we will announce in due course.”

“Any comments about the participation and qualification criteria of the scheme prior to finalization by any external parties are therefore premature.”

Gore’s comments on the BEE scheme

A short clip where Gore explains Discovery Bank’s black shareholding plan is posted below.

Now read: Discovery Bank explains “no whites” share plan

Latest news

Partner Content

Show comments

Recommended

Share this article
Discovery Bank’s “no whites” share plan under fire