BANKSETA ANNUAL REPORT 2023

CHIEF EXECUTIVE OFFICER’S REPORT General Financial Review

The year under review has been one in which South Africans have slowly but surely clawed their way back from the disruptions of the COVID pandemic. The BANKSETA is no exception. We are finally seeing a return to normal delivery of programmes with all stakeholders supporting the return to pre-COVID delivery modes of training. Overall performance for the period has improved to 80% of our targets, up from 72% in 2021/22, providing confidence that we have moved beyond the shackles of the interruptions brought about by COVID and can look forward to an even better performance in the following years. Surplus funds have been reduced by 9% to R965 million (R1059 million in 2021/22). Commitments on the surplus funds is at 96% (R926 million). Discretionary grant improved to R787 million from R523 million in the previous year. We have maintained a mandatory claims ratio of 98% in the current year. Spending Trends Despite the sluggish economy the banking sector continued to enjoy growth in their income streams. Total revenue increased to R1 021 million up 14% from previous year’s figure of R896 million. BANKSETA spending is guided by legislation which requires that the entity surrenders 20% of its levies to the National Skills Fund and the remaining 80% is spent as follows. 20% on mandatory grants for levy paying employers in the sector. 10,5% on administration expenses of the SETA 49,5% on discretionary grants to support various goals of the National Skills Development Plan. Reflecting the above guidance, BANKSETA saw an overall increase in the spending categories of mandatory and discretionary grants. Discretionary grant expenditure improved 50% to R787 million (R523 million in 2021/22). BANKSETA returned R229 million in mandatory grants to qualifying employers representing a claims ratio of 98%. This is an improvement of 18% compared to the previous year figure of R194 million. The SETA remained within the legislated 10,5% of administration expenses allowed. Cash and cash equivalents at year end were R1127 million (R1213 in 2021/22) representing a 7% • • •

Mr Eubert Mashabane Chief Executive Officer

decrease from the previous year. Our net deficit of R93 million showed an improvement in the reduction of surpluses compared to a surplus of R95 million in 2021/22. Accumulated reserves decreased 9% to R969 million compared to R1 063 million in 2021/22. We achieved a commitment ratio of 96% on our reserves which should improve our expenditure in the 2023/24 financial year. Capacity Constraints and Challenges BANKSETA stakeholders continued to support and maintain higher project implementation levels which translated into higher discretionary grant spending. There were however pockets of sluggish implementation in certain of our discretionary grant projects. Employer-driven projects in the Pivotal and Reskilling areas performed at 55% and 28% respectively of the planned targets. BANKSETA continues to provide support to stakeholders to ensure projects are executed within the stipulated timeframes. BANKSETA could not complete the Organisational Design study project which is meant to address its own internal capacity to be able to undertake on site monitoring of projects. We continued to provide other compensating measures such as sourcing an external provider to augment our current capacity. The Accounting Authority has given a firm undertaking to address the capacity constraints of the SETA. New or Proposed Key Activities We have also responded positively to the Government’s economic recovery plans by rallying behind the Economic Reconstruction and Recovery Plan (ERRP) and the Presidential Youth Employment Initiative (PYEI). We provided dedicated funding for

14