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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.
As well as focusing on developments in the commercial banking sector, the detailed Banking Industry report includes information on Other Credit Granting, Lease Financing, and Loyalty and Reward Programmes. Profiles for 91 companies active in the sector are provided. Included is VBS Mutual Bank, originally known as the Venda Building Society, which gave President Jacob Zuma a loan in 2016 to finance the R7.8m he was forced to pay back by the Constitutional Court for non-security upgrades to his home in Nkandla. Since this time VBS has clinched a deal to be the official banker of the Twelve Apostle Church in Christ (TACC), which claims to have 6.8 million members. Also profiled is Capitec, which as at December 2016 had the second-largest market share in the unsecured credit market book and showed the biggest growth in customer numbers year-on-year with an increase of 1 million customers.