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Cape Town - Although South Africa’s banking sector is still dominated by the five largest banks, international banks are slowly eating away at their market share, the Reserve Bank’s annual report of its Bank Supervision Department showed.
The report released on Wednesday showed that the five largest banks by assets – Standard Bank; FirstRand, owner of FNB; Absa, part of Barclays Group Africa; Nedbank and Investec – collectively held 89.2% of the market at December 31 2015 compared with 90.6% in 2014, while local branches of international banks grew market share to 7.3% from 5.8% in 2014.
According to the report a total of 40 international banks operated authorised representative offices in South Africa. Of those, the biggest by assets are Citibank, JP Morgan Chase, HSBC, Standard Chartered and Bank of China.
The report showed total banking assets stood at R4 831bn, an increase of 15.69% over the previous year. This growth in assets was mostly attributed to the annual growth of 11.3% in gross loans and advances and 89.2% in derivative financial instruments.
The increase in gross loans and advances was mainly due to increases in other loans to customers, which grew by R126bn year-on-year, and term loans, which recorded an R85bn y/y growth.
The report said banks’ operations in South Africa remained adequately capitalised, with capital adequacy ratios decreasing slightly to 14.2% at the end of December.
On actions to enforce compliance, the Reserve Bank confirmed the fines it imposed on Capitec (R5m) and Deutsche Bank (10m) in February last year.
Capitec was fined for failing to report cash transactions above R25 000, and Deutsche Bank for not having appropriate anti-money laundering measures.
READ: Hefty fines for Capitec, Deutsche Bank
