Coovadia: Banking's white monopoly capital myth must be dispelled

Cas Coovadia, MD of the Banking Association of South Africa (File, Supplied)
Cas Coovadia, MD of the Banking Association of South Africa (File, Supplied)

Cape Town – The banking industry in South Africa has made much progress across sectors and any suggestion that it is the least transformed in the country is incorrect, said Cas Coovadia, managing director of the Banking Association of South Africa (Basa).

Speaking at public hearings on Tuesday jointly hosted by Parliament’s standing committee on finance and the portfolio committee on trade and industry on transformation in the financial services sector, Coovadia said Basa's data reflects the progress made with transformation.

“That does not mean we are satisfied with the current situation – far from it. We are very keen on engaging with the dialogue (on transformation in the financial services sector) so that we can improve the performance and size of our economy in a inclusive manner.”

Coovadia mentioned some statistics such as the investments made by the industry and the number of transactions the banking sector facilitates, as well as the fact that it manages R4.8trn in assets.

He cautioned MPs to be “mindful of certain myths” and said the banking sector displays patterns similar to ownership patterns of the JSE.

“The largest share – 49% - of the top six South African banks is owned by foreigners, 34% by institutions such as pension funds, and the remaining 17% by other categories of investors, including individuals.”

Black ownership on JSE surpasses white ownership

According to Coovadia, 2016 figures show that black ownership on the JSE at 23% surpassed white ownership at 22%. “I trust these figures will go a long way towards dispelling the ‘white monopoly capital myth’,” he added.

He pointed out that the banking industry is not resistant to transformation, but added that a careful analysis will show that compared to other sectors it has “performed very well”.

“The sector voluntarily signed a transformation charter in 2003 before the transformation was promulgated (in black economic empowerment legislation).”

He further emphasised that black people constitute the majority of all managers in the banking industry. “Most of the gains have occurred at the junior to middle management levels.”

However, positions for black people at the top management level remain a challenge, Coovadia acknowledged.

“Also, black board members and executives is the area where progress has been slow.”

Coovadia welcomed the upcoming Financial Sector Summit which will take place later in 2017. “We believe this will provide a platform for deep reflection on what has been achieved, and what remains to be done, as well as an opportunity to agree on the way forward.” 

ZAR/USD
17.06
(-0.66)
ZAR/GBP
21.25
(-0.42)
ZAR/EUR
19.16
(-0.41)
ZAR/AUD
11.84
(-0.78)
ZAR/JPY
0.16
(-0.46)
Gold
1775.51
(+0.02)
Silver
18.03
(+0.64)
Platinum
810.00
(+0.43)
Brent Crude
42.92
(+2.64)
Palladium
1900.48
(+0.71)
All Share
54572.26
(-0.08)
Top 40
50259.66
(-0.10)
Financial 15
10190.71
(-0.24)
Industrial 25
76688.42
(+0.70)
Resource 10
50158.82
(-1.20)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1566 votes
I am taking a hit, but should be able to recover in the next year
23% - 2038 votes
My finances have been devastated
34% - 3055 votes
It's still too early to know what the full effect will be
25% - 2215 votes
Vote