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South Africa’s Banking Sector
This report focuses on the South African banking industry and includes other credit granting, lease financing, and loyalty and reward programmes. The finance, real estate and business services industry contributed 18.6% to GDP in 2015 and with total banking sector assets of R4,855bn in January 2016, the banking sector plays a vital role in the country’s economy. It distributes resources and capital across all economic sectors, which in turn allows these sectors to contribute to the performance of the economy.
A Well Developed Sector
According to Banking Association South Africa, the country has a well developed and proactively regulated banking system which is equal to or greater than those of industrialised countries. As a result, the sector has attracted international interest, with numerous foreign banks establishing offices in South Africa and international banking organisations acquiring shares in major local banks. There are currently six foreign controlled banks, 39 foreign bank representatives and 15 branches of foreign banks registered with the South African Reserve Bank.
Despite the resilience of the sector, it is facing numerous problems emanating from the real economy, mainly from rising unemployment, ongoing labour disputes and comparatively increased levels of inflation. In addition, running costs are increasing, often as a result of the implementation of measures to ensure compliance with regulations. Other factors that are putting pressure on margins are rising interest rates and the increasing number of households that are defaulting on the repayment of loans.
The detailed report on the competitive banking sector describes the current market, the latest regulatory and corporate developments and discusses factors influencing the success of the sector. The report profiles 95 companies, including the “Big Four” banks, FirstRand, Standard Bank, Barclays Africa (Absa) and Nedbank, as well as major players in all sub-sectors of the Banking Industry.