Find Banking and Financial Services expertise in South Africa
South Africa has a sophisticated banking sector and well-established capital markets. The World Economic Forum’s Global Competitiveness Report (2011-12) rated it second in the world for the soundness of its banks, ranking its healthy financial sector below only Canada. The four largest banks are ABSA (the Amalgamated Bank of South Africa), Standard Bank, Nedbank and FirstRand Bank. South African banks are strategically positioned in Africa and prevalent internationally, so aside from the established presence in the domestic markets, they have quickly and profitably expanded into African markets and beyond, since the ending of international economic sanctions in the 1990s. This advantageous market success has led to further international interest. Barclays Bank, one of the biggest banks in the world, became the main shareholder of ABSA in 2005; the Industrial and Commercial Bank of China (CBCs) acquired a 20% stake in Standard Bank in 2007.
Regulation of Financial Services
The South African Reserve Bank has lead responsibility for prudential regulation of banks and the Financial Services Board (FSB) for non-banking financial institutions. In 2011 the South African government completed a comprehensive review of the key challenges facing the financial sector in the wake of the global financial crisis which began in 2007. One of the key measures proposed to counter these was to expand the mandate of the FSB to include the market conduct of retail banking services and consumer protection. Consumer protection in financial services, by itself, is currently and mainly a responsibility of the National Consumer Commission. A range of initiatives was planned by the National Treasury to encourage greater access to financial services, a major challenge in a country still struggling to overcome a large divide between rich and poor. These initiatives were intended to build on a combination of market-friendly interventions by the public and private sectors that encouraged the growth of the ‘banked’ population in South Africa from around 25% in 1994 to 63% in 2008.
Development of Financial Services
South Africa received from the World Bank’s Ease of Doing Business Index (2011) a 1st place ranking for getting credit worldwide (out of 183 countries), based upon its strong legal rights and depth of credit information. The high ranking placed it in a comparable position to that of the United Kingdom and Malaysia. In relation to protecting investors it was ranked 10th, placing it considerably above the next highest sub-Saharan nation – Rwanda rated at 29th. The World Economic Forum’s Global Competitiveness Report (2012-13) placed South Africa a very high 2nd (out of 144 countries) for its availability of financial services, with an overall value of 6.4 out of 7, considerably above the world mean of 4.5. It showed a similar strength in financing through the local equity market, ranking 3rd. With regard to its affordability of financial services it was placed 22nd, whilst it was rated 30th for the ease of access to loans.