Johannesburg - First National Bank parent FirstRand plans to raise R2.5 billion through the issue of preference shares, which could be used to fund the sale of 10 percent of the group's equity to black economic empowerment (BEE) partners.
The group, which said it had signed a memorandum of understanding with four BEE partners, refused to divulge any details.
Laurie Dippenaar, the chief executive of FirstRand, said the group felt it important to keep the identities of its partners under wraps until the deal was ready to be announced.
He said the group was committed to completing the deal in December.
"We don't believe the charter is a sprint race."
What Dippenaar would say was that there would be a smaller concentration of benefits among individuals.
FirstRand, the country's second-largest bank, lost BEE icon Cyril Ramaphosa to rival Standard Bank in July.
Widely expected to lead the BEE consortium that would ultimately take a 10 percent stake in the R61 billion market capitalised group, Ramaphosa teamed up with Saki Macozoma to lead the consortium buying a R4.1 billion stake in Standard Bank's South African operations.
FirstRand and Nedcor are the only remaining banking groups left to finalise their BEE ownership deals. Absa concluded its deal with Mvelaphanda in April.
Dippenaar said significant progress had been made towards third-party funding but the group "did have a plan B".
FirstRand said it would still decide how to use the capital it raised through the preference share issue.
Standard Bank successfully raised R3 billion through the same instruments earlier this year after openly stating that it might use the proceeds to fund its empowerment transaction.
FirstRand said it planned to issue the non-redeemable, non-cumulative preference shares by the end of October.
Johan Burger, chief financial officer of FirstRand, said not only would the issue of the shares reduce the group's weighted average cost of capital but, along with the R1.2 billion freeing of capital from the sale of Ansbacher, the group's UK operations, to Qatar National Bank, would result in an excess capital position.
Burger said by issuing the preference shares, the capital adequacy of the group would stand at 15.3 percent against the regulatory requirement of 10 percent.
According to the South African Reserve Bank banking supervision department, the average risk-weighted capital adequacy ratio of banks came to 13.3 percent at the end of June 2004, which was somewhat higher than the 12.3 percent recorded at the end of June 2003.