The Banking Association of South Africa calls for gazetting of charter
The Banking Association South Africa (BASA) has come out strongly in favour of the gazetting of the Financial Sector Charter (FSC) under Section 9 of the Black Economic Empowerment Act, to ensure that codes applying to the banking industry align with those set by Department of Trade and Industry (DTI) on the transformation of the financial services sector.
This follows the release of the Financial Sector Charter Review for 2007, which has painted a glowing picture of the banking sector’s achievements in meeting transformation targets in areas such as employment equity, procurement and enterprise development, access to financial services for historically disadvantaged communities, empowerment financing, ownership and control as well as corporate social investment.
Speaking at a media briefing, BASA managing director, Cas Coovadia, said the failure by government to gazette the Charter was making it difficult for banks to continue reporting under the Charter.
“The statutory position, particularly in government procurement, requires compliance with DTI codes. We are convinced a political decision is urgently needed to gazette the Charter without further delay,” he said.
Outlining the achievement of the banking sector in 2007, Coovadia said the banks were delivering significantly in areas that make a real difference in people’s lives and those that contribute to sustainable development.
Some of the highlights include success in:
- The appointment of black senior managers - 23.35 %
- The appointment of black senior women - 6.86%
- Achieving 54,40% in procurement from black suppliers
- Providing over R37,6 billion in low-income housing finance
- Providing over R9.8 billion to finance black SMEs
- Providing R66,984 billion in BEE transaction financing
Coovadia said the country’s big four banks, ABSA, First Rand, Standard Bank and Nedbank contributed over R14 million towards the Gauteng government’s strategy to fight crime.
“The funding will go towards high-tech cameras and support at 40 ATM hot spots,” he said.
Commenting on the global financial crisis Coovadia said the local banking industry had applied conservative lending policies which shielded the banks from the initial sub-prime crisis.
“SA banks are well capitalised, with average core Tier 1 ratios for the “Big 4” of 9, 6 percent as at 30 June 2008. This is about three percent higher than corresponding average of large international banks. Ratio of assets to ordinary shareholder equity is 16.1 times compared to international bank average of 34.6. Our funding is strong. The ratio of loans to deposits averages 94.7 percent compared to 125.8 percent for international banks. The big four have total assets outside South Africa of about R600 billion, yet exposure to sub-prime portfolios was minimum,” he said.
