The Banking Industry in South Africa 2017

The South African Banking Sector

The South African banking sector which has total assets of R4,890bn is under the spotlight for collusion by three of the major banks on fixing foreign currency. Other important developments in the sector include the closing of the accounts of the Gupta family, regarded as politically connected to President Jacob Zuma, which led to the scrutiny of black ownership in the financial sector, and the major banks defending their lending practices and records in addressing racial inequality. The firing of Finance Minister Pravin Gordhan and his deputy Mcebisi Jonas and the controversial cabinet reshuffle at the end of March 2017 has been described by the Banking Association as a matter of “extreme concern for the whole of South Africa.” A direct result has been a downgrade to junk status of the country’s foreign currency debt by global ratings agency S&P and the Rand immediately plummeting more than 4% after it had strengthened more than 20% in the course of a year.