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The consistency between the theory and practice of Islamic banking in South Africa

  • Authors: Aboo, Faizal
  • Date: 2016
  • Subjects: Banks and banking - South Africa , Banks and banking - Religious aspects - Islam
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/237191 , uj:24299
  • Description: M.Com. (Development Economics) , Abstract: Since the first Egyptian experiment in 1963, Islamic banking has grown rapidly. The establishment of the Islamic Development Bank and the Dubai Islamic Bank in 1975 were watershed moments in modern Islamic economics. Its growth has been recorded at an average of 10-15% per year and the industry is worth over $1 trillion. Growth in the Middle Eastern countries has resulted in unprecedented growth which has further resulted in the introduction of Islamic banking products in conventional banks. This growth has equally been seen in the South African banking market with the establishment of Islamic banking products through most conventional banks. This paper aims to establish if there is a mismatch between the ideal of Islamic banking and the practical application of it. To answer this question this paper seeks to establish a link between the rate of interest and the rate of profit and establish if there exists a long-term relationship between the South African interest rate and the rates of return offered on Islamic banking instruments. An empirical analysis which includes a cointegration test followed by an error correction model seeks to prove this hypothesis. Results from the empirical analysis were consistent with the economic theory of the link between the rate of interest and the rate of profit. It was noted that within the South African model, the Islamic Sukuk has a long-term relationship with the STeFI which is used as a proxy for the South African interest rate. The subsequent error correction model shows that Islamic Sukuk lags the STeFI by one period and corrects for disequilibrium in the following period; this further compounds the economic theory on offer in that the Sukuk is always behind the STeFI and always needs to adjust to it.
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Interpretation of ‘liquidation proceedings’ in terms of Section 131(6) of the Companies Act : a case analysis of Richter v ABSA Bank Limited

The effects of bank regulation and supervision on bank performance and risk taking in South Africa

  • Authors: Taranhike, Edmore
  • Date: 2017
  • Subjects: Banks and banking - South Africa , Banks and banking - Risk management - South Africa , Basel II (2004 June 26)
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/271746 , uj:28908
  • Description: M.Com. (Finance) , Abstract: The effects of bank regulation and supervision on bank performance and risk taking have recently been subject to a number of empirical studies. However, these studies have largely produced conflicting and inconclusive results and very few such studies have been conducted in South Africa. Although aspects of bank regulation and supervision are quite broad, scholars have recently focused on the four aspects based on the three pillars of the Basel II Accord, namely, capital requirements, official supervision, private sector monitoring of banks and restrictions on banking activities. A quantitative approach was adopted in this study to establish the nature and significance of the relationships between aspects of bank regulation and supervision variables and bank performance and risk taking variables. Panel data regression techniques were applied to the variables obtained from historic data for the period 1999 to 2010. The main regression results indicated that bank regulation and supervision do not have statistically significant effects on bank performance and risk taking in South Africa when all fifteen banks in the sample are analysed collectively. When banks are grouped and analysed separately, the results indicated that for large banks only capital requirements regulation improves bank performance by enhancing net interest margins and lowering operating costs but other aspects do not affect bank performance. Only restrictions on banking activities and official supervisory power reduce credit risk taking for large banks. For medium-sized banks, only capital requirements regulation improves cost efficiency while restrictions on bank activities and official supervisory powers increase operating costs. Capital requirements regulation reduces credit risk taking and overall bank risk taking; however, restrictions on banking activities and official supervisory power increase credit risk taking for medium banks although they do not affect overall bank risk taking. The performance of small banks is negatively affected by restrictions on banking activities. Restrictions on banking activities and official supervisory power reduce credit risk taking for small banks but capital requirements regulation increases credit risk taking. This study concludes that bank regulation and supervision do not have uniform effects across all bank sizes in South Africa. Therefore policies should be designed to target different categories of bank sizes for them to be more effective in achieving their desired outcomes.
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Modelling aggregate risk of the South African banking industry in the context of the Basil Pillar II framework

  • Authors: Khoza, Dingaan Jack
  • Date: 2017
  • Subjects: Banks and banking - South Africa , Banks and banking - Risk management - South Africa , Bank capital - South Africa , Financial statements - South Africa , Copulas (Mathematical statistics)
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/245834 , uj:25470
  • Description: M.Com. , Abstract: This study uses the aggregate balance sheet and income statement of South African banks to implement a risk aggregation model that aggregates credit, market and operational risks with the aim of generating total risk estimates using both Value at Risk (VaR) and Expected Shortfall (ES) as risk measures. The results are thereafter used to determine the supplemental Pillar II economic capital required in order to maintain the capital adequacy of the South African banking industry. We first model the return distributions due to credit and market risk using a multivariate risk factors sensitivity model, with the macroeconomic risk factors’ dynamics modelled through an asymmetric GARCH (generalize Autoregressive Conditional Heteroskedasticity) model designed by Baba, Engle, Kraft and Krona (1990) (i.e. BEKK). Operational risk losses are assumed to follow a lognormal distribution. The Gaussian copula and t-copulas are then used to aggregate the three loss distributions (i.e. credit, market and operational risk distributions). The total risk given by copulas is compared to the total risk calculated through the less complex simple additive and variance-covariance methods. Our results suggest that the South African banking sector’s Pillar I regulatory capital as at end of December 2015 should be supplemented by an amount of approximately 52 billion ZAR when using as a benchmark the Gaussian copula risk aggregation model measured through the ES metric at 99.9% confidence level. These results suggest that the Pillar 2A capital requirement imposed by the SARB should double from the current maximum of 2% to 4%.
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Factors affecting female generation Y consumer’s selection of a bank

  • Authors: De Broize, Cézanne Catherine
  • Date: 2015
  • Subjects: Banks and banking - South Africa , Banks and banking - Customer services - South Africa , Generation Y , Women consumers
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/82185 , uj:18932
  • Description: Abstract: The South African retail banking industry is a highly competitive environment where major industry players compete for the largest market share of the banked and unbanked consumer market. The consumer segment of focus in this study is the female Generation Y consumer, due to their high disposable incomes, technological savviness, and brand consciousness. Within the retail banking industry in South Africa, the number of formally banked female consumers has increased to 87%, and is noted as being significantly higher than the number of formally banked male consumers, which is 81%. To maintain the largest market share, the major South African retail banks must determine the factors and variables that influence the female Generation Y consumer’s selection of a retail bank, so as to attract consumers from competing retail banks, as well as proactively prevent the attrition of their current consumers. The primary objective of the study was to determine the factors that had an influence of the female Generation Y consumer’s selection of a retail bank using consumers residing in the Gauteng province. The aim of the study was to identify the factor dimensions for purchase intention when selecting a retail bank. These factor dimensions were identified, through a literature review and previous studies, namely price, product selection, innovation, status, and peer referral. A descriptive research approach was followed and data was gathered, using quantitative research methods. A self-administered questionnaire was administered through convenience sampling to research participants at universities, shopping malls, and banking halls, within the Gauteng province. The target population for this study was limited to research participants between the ages of 18 and 36 years, who held a bank account with one of the five major South African retail banks (ABSA, FNB, Standard Bank, Nedbank, and Capitec Bank). A total of 300 questionnaires were distributed and 274 were retained for data analysis. Pearson product moment correlation analysis and regression analysis were used to test the influence of the relationships between various variables in the study. The peer referral subscale developed as a two-factor solution and was split into recommendation and trustworthiness. The remaining subscales were all considered valid... , M.Com. (Business Management)
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Value proposition as a strategic tool in a South African bank

  • Authors: Rakosa, Kenosi
  • Date: 2018
  • Subjects: Industrial management - South Africa , Banks and banking - South Africa
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/271868 , uj:28923
  • Description: M.Com. (Business Management) , Abstract: South Africa has a sound banking industry which has been disrupted by the information age, sluggish economic growth and new entrants. Value proposition can be applied to meet customer’s changing banking demands as South African banks endeavour to establish strategy for higher and sustainable profitable returns. The concept of the value proposition has its origins in marketing management, however it was established in this study that value proposition can be applied in strategic management. Value proposition cannot be separated from the rest of the business and are part of the integrated strategic tools. A gap that currently exists in literature is that value proposition is positioned as a Marketing concept but is not a strategic management tool. In this research, a case study of one of the big banks in South Africa is presented to critically investigate and understand value proposition strategy. Value proposition provide a platform so that customers’ needs can be addressed for their entire relationship with the bank. Value proposition enables banks to establish a holistic view of the customer. The study reveals that the bank under study is maturing and refining value proposition to improve its strategy. The research depicts the realistic conditions and challenges that the bank faces in the implementation of value proposition strategy. In this study, a unique representation of value proposition as a business strategy is provided instead of applying a marketing lens to value proposition. The contribution of the study is to show the applicability of value propositions as a strategic tool in the case study bank. An interpretivism qualitative research design has been applied to the study to understand value proposition. The key instrument for the study is interviews conducted by the researcher. This study therefore investigates value proposition as a business strategy in a South African bank. Some of the key findings that emanated were that the bank was considered reactive and banking customers were price-sensitive. Recommendations are based on strategic literature and findings so as to meet the identified challenges. The recommendations made in the study include the enhancement of business case methodology and environmental scanning to improve the bank’s position in the market. The bank should aim to continue to be relevant from a technological perspective and utilise product leadership to appeal to aspirant, status-conscious customers.
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A time-varying analysis of the sensitivity in commercial bank stock returns to market, interest rate and foreign exchange risk exposures in South Africa

  • Authors: Mazomba, Xolani
  • Date: 2017
  • Subjects: Banks and banking - South Africa , Interest rates - South Africa , Foreign exchange rates - South Africa , GARCH model
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/245884 , uj:25477
  • Description: M.Com. , Abstract: The objective of this study is to investigate the sensitivity of the South African commercial banks to the market, interest rate and exchange rate risk exposures. The study estimates a GARCH (1,1) model using the above variables including their conditional variances. To investigate the impact of the risk premium factor, a GARCH-in-Mean model with implied volatility of the exogenous variables as explanatory variables is used. The research relies on data of the JSE Top 40 companies and the major commercial banks. The data series ranges from 2003 to 2016. Using the TED spread, the data is split into three sub-samples the period prior to the crisis, during the crisis and the post-crisis period. It was found that the bank stock returns are sensitive to the market, interest rate and exchange rate risk. The banks are found to be influenced mostly by the 1-year and 10-year rates during the low volatility periods, while during the crisis period the impact extends to even shorter periods of 1-month, 3-month and 6-month yields. Furthermore, the banks are found to be more sensitive to the exchange rate during the low volatile periods, while the small banks are the most affected during the high volatility periods. Regarding the conditional variance, the study found that the bank stock returns follow a GARCH generating process. Furthermore, the study found that the conditional volatility from the GARCH-in-Mean model was irrelevant in pricing the bank stocks during the high volatility periods. The conditional variance of the GARCH-M was estimated with an inclusion of the implied volatility of the exogenous variables: market, interest rate and foreign exchange rate returns. The study found that the parameters have a very low significance overall and the impact of the volatility from the market and foreign exchange rate tended to decline during the high volatility period; while the effect of the interest rate volatility rises during the same period.
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The anomaly of the classification of financial assets by South African banks

  • Authors: Ompala Nkoulikie, Johanny Ben Yahmed
  • Date: 2014-03-03
  • Subjects: Accounting - Standards - South Africa , Banks and banking - South Africa , Financial instruments - South Africa , Financial statements - South Africa
  • Type: Thesis
  • Identifier: uj:4216 , http://hdl.handle.net/10210/9574
  • Description: M.Com. (International Accounting) , This minor dissertation investigates how the conflict in the classification of financial assets between IAS 39 Financial Instruments: Recognition and Measurement and IAS 1 Presentation of Financial Statements is being bridged in the financial statements of banks by reviewing the classification of financial assets in the statement of financial position, accounting policies and the notes to the financial statements. IAS 39 provides specific classifications for financial instruments, while IAS 1 provides a classification based on liquidity. The minor dissertation applied a quantitative content analysis of the annual financial statements of South African banks for the 2011 financial year. Companies in the sample selection were drawn from the FTSE/JSE classification of the Top 100 companies selected on their market capitalisation on 30 December 2011. Seven banks are included in the Top 100 companies. The minor dissertation found that the classification of financial assets as required in IAS 39 is not shown in the statement of financial position. The statement of financial position is based on the liquidity classification in IAS 1. In contrast, the accounting policies for financial instruments are based on the IAS 39 classification. The structure of the notes to the financial statements follows the classification in the statement of financial position. The minor dissertation further found that the conflict between the IAS 1 and IAS 39 classifications is bridged in the detail of the notes. Two methods are being used to bridge the conflict. The first method is to provide an IAS 39 reconciliation in each applicable note. In this reconciliation, the total amount of the note is allocated to an applicable IAS 39 classification. The second method is that the line items in the statement of financial position are allocated IAS 39 classifications in a table format. The table allocates the amount of individual assets and liabilities as identified in the statement of financial position in the categories required by IAS 39. Through using both Method 1 (reconciliation in each note) and Method 2 (a separate table based on the statement of financial position) the conflict between IAS 1 (liquidity classification) and IAS 39 is bridged. However, the IAS 39 classification is not directly obtainable from the primary financial statements. In the future, the study can be more comprehensively replicated in other countries and international research, as this exploratory research was only limited to seven banks in South Africa. Further research can also investigate entities other than banks to see how they bridge the conflict between IAS 1 and IAS 39. The review of the treatment of financial instruments resulted in the replacement of IAS 39 by IFRS 9 in November 2009. Future research of the new IFRS 9 classifications may assess how the conflict is being treated. In addition, further research can assess the quality of disclosure in the classification of financial assets/instruments in the financial statements of banks and other entities
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The FirstRand Founders’ story : exploring synergistic relationships

  • Authors: Fourie, Christel
  • Date: 2016
  • Subjects: First National Bank of Southern Africa , Performance - Management , Banks and banking - South Africa , Organizational effectiveness - Measurement
  • Language: English
  • Type: Doctoral (Thesis)
  • Identifier: http://hdl.handle.net/10210/82418 , uj:18955
  • Description: Abstract: The study explores and describes the FirstRand founders’ efforts and influence in how a business success story unfolded. The research is driven by a desire to understand what made this story. FirstRand is one of South Africa’s largest and foremost financial services groups. The group is made up of world-class companies such as Rand Merchant Bank, First National Bank and WesBank. Hallmarks of all its companies, present and past, include a track record of innovation, strong values and an ownermanager philosophy. The group’s entrepreneurial history can be traced back to 1977 and the founding partnership of GT Ferreira, Laurie Dippenaar and Paul Harris. Over several decades the founders, together with a stable management team, built the group through a series of strategic acquisitions and mergers. The research question was formulated as: What did the three founders contribute individually and collectively to FirstRand’s success? Accordingly, a qualitative mode of enquiry was adopted and a case study design applied. The data were collected through semi-structured interviews with the founders and key role players such as chief executives, supplemented with other data sources. Data were analysed using narrative analysis. The goal was to describe the research setting comprehensively so as to enable readers to see the case study as the writing of history. The researcher’s insights clustered into four main interpretation themes: firstly, the founders’ partnership and complementarity as a success factor, secondly, how leadership worked in the founders’ eyes, thirdly, the founder-leaders as architects of culture formation and fourthly, how the founders created the conditions for emergence. What these insights mean was explored in the section on sensemaking by drawing links to theory that offer plausible perspectives on the FirstRand story. The study’s findings are relevant in revealing theories-in-use from three of the most highly regarded business leaders. There is no similar example to be found. The study’s key contribution is of a theoretical nature. The researcher’s overall impressions point to the founders having contributed a significant leadership and culture perspective that was lived and time-tested over more than three decades. Herein lie the true value-add and uniquely original contribution from this study. In addition several practical and life lessons came to the fore with possible application to readers’ own situations. The... , D.Phil.
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Die invloed van monetêre veranderlikes op die bate- en lastestruktuur van banke

  • Authors: Swartz, Le'ande
  • Date: 2015-02-09
  • Subjects: Monetary policy , Banks and banking - South Africa
  • Type: Thesis
  • Identifier: http://ujcontent.uj.ac.za8080/10210/378011 , uj:13205 , http://hdl.handle.net/10210/13231
  • Description: M.Com. (Economics) , The aim of this study is to identify the various monetary variables financial risks involved in the structuring of the Asset and Liability portfolio of a bank and to establish their influence on a dynamic financial system. The implementation of a successful Asset and Liability management plan is the ultimate objective of trying to maximize capital gains. Therefore, the success of such a management plan lies in its ability to limit the exposure of the bank to financial risks and monetary variables and finally to increase profitability. In this study an attempt is made to create a portfolio management plan. For this purpose a linear optimization computer nodal, is used. In order to obtain better understanding of the financial system in 'which such a portfolio management plan is implemented, a description of both the international and local financial systems ,including a comparison between the South African and United States markets,is set out in this study. In chapter V the strategy to limit financial risk exposure used in the United States' is discussed. Following a comparison made between the workings of the South African and United States financial markets, the conclusion is that, given a few adjustments, the same strategy could be used in the South African financial system...
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Graduate unemployment in South Africa’s banking sector

  • Authors: Oluwajodu, Faith Moromoke
  • Date: 2014-06-11
  • Subjects: College graduates - Employment - South Africa , Skilled labor - South Africa , Unemployment - South Africa , Banks and banking - South Africa , Bank employees - South Africa
  • Type: Thesis
  • Identifier: uj:11520 , http://hdl.handle.net/10210/11215
  • Description: M. Com. (Development Economics) , In recent years unemployment has received considerable international attention from scholars, policy makers, and labour practitioners, because it has reduced economic welfare, reduced output, and eroded human capital. Researchers argue that South Africa is faced with structural unemployment because of the insufficient demand for low-skilled resources and the sufficient demand for highly skilled resources. However, in terms of highly skilled resources, young South Africans have become better educated over the last decade, resulting in a significant growth in the size of the graduate labour force. This growth emanates particularly from the fact that the majority of the graduate labour force has completed their tertiary education. Despite this growth, graduate unemployment appears to be rising along with the overall unemployment rate. The aim of this study is to sensitise policy authorities to the impact of graduate unemployment on the economy by highlighting the perceived causes of graduate unemployment in South Africa’s banking sector. The research was conducted with the aid of a survey administered to two groups, namely a graduate group and a human resource (HR) manager group. The result derived from the research shows that the quality of tertiary institutions which relates to educational standards and culture, the quality of education, high expectations, a shortage of skills, a lack of work experience, and a lengthy process of application and job search are perceived to be the possible causes of graduate unemployment in South Africa. The study makes several tentative recommendations relating to what can possibly be done to reduce graduate unemployment. Among the recommendations proposed are the improvement of the quality of education and institutions, a well-planned career guidance mechanism, and a graduate recruitment subsidy.
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Solvabiliteit van die Suid-Afrikaanse handelsbanke soos gemeet aan internasionale standaarde

  • Authors: Kock, André Daniel
  • Date: 2015-02-09
  • Subjects: Banks and banking - South Africa , Banks and banking, International.
  • Type: Thesis
  • Identifier: uj:13237 , http://hdl.handle.net/10210/13261
  • Description: Ph.D. (Economics) , The object of this study was to examine the solvency standards of South African commercial banks on the basis of internationally accepted criteria, in order to determine whether these institutions maintain adequate capital resources to meet their liabilities at all times. The question of capital adequacy was approached from the point of view that the solvency of banks is subject to the influence of certain structural changes that are taking place in the Western banking system. These changes can be classified into four broad categories, viz. increasing government intervention in private banking; the formation of banking groups with a view to mobilising large resources of funds; the diversification of banking services; and a greater international alignment of Western banks. In the ever-changing banking environment, and given the risks to which banks are continually exposed, banks aim to maintain adequate solvency standards at all times without sacrificing too much liquidity and/or return on shareholders' funds. Because of the commercial banks' unique position as holders of the public's financial assets, as well as their ability to create money, they are subject to monetary control and strict prudential supervision. When a bank finds itself in the position that, after taking its own capital resources into account, it is unable to meet its liabilities because of these liabilities exceeding its assets, insolvency is almost unavoidable. To continue in business, the bank's capital should therefore be adequate not only to finance its infrastructure but also to absorb unforeseen losses.
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The impact of Section 34 of the Constitution of the Republic of South Africa, 1996 on banking law

  • Authors: Ngwenyama, Lerato Rudolph
  • Date: 2016
  • Subjects: South Africa. Constitution of the Republic of South Africa, 1996 , Banks and banking - South Africa , Banking law - South Africa
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/124444 , uj:20918
  • Description: Abstract: The dissertation explores the impact of section 34 of the constitution of the Republic of South Africa, 1996 on certain aspects of banking law. During parliamentary sovereignty, the parliament and the executive could enact legislation ousting the jurisdiction of courts to adjudicate public-administration matters. However, the constitution in section 34 has brought changes to our banking law by compelling the alteration of established statutory or common law legal principles. The impact brought by section 34 of the constitution on banking law is explored by paying special focus to the law in potential conflict with section 34 of the constitution to see how the courts have addressed the issue of non-compliance with section 34 of the constitution. The law in potential conflict with section 34 of the constitution relates to mainly to manners in which courts could be by-passed by banks in the protection of their interests. Against this background this dissertation discusses and analyses case law in this regard which has contributed towards the development of both our common law and statutory law some of which was in conflict with section 34 of the constitution by limiting unfairly the right of access to court guaranteed by section 34 of the constitution. The following five topics are dealt with specifically: section 38(2) of the Northwest Agricultural Bank Act 14 of 1981; sections 34(3) (b) to (7), (9) and (10) and 55(2) (b) to (d) of the Land Bank Act 13 of 1944; Perfecting clauses in notarial bonds of movables without court intervention; Rule 8 of the Uniform Rules of the High Court; and section 2 of the Vexatious Proceedings Act 3 of 1956. , LL.M. (Commercial Law)
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Determination of net interest margin drivers for selected financial institutions in South Africa : a comparison with other capital markets

  • Authors: Mudzamiri, Kizito
  • Date: 2013-05-01
  • Subjects: Banks and banking - South Africa , Financial institutions - South Africa , Net interest margins , Classical Linear Regression Model , Ordinary Least Squares data estimating technique , Bank profits - South Africa , Interest rates - South Africa
  • Type: Thesis
  • Identifier: http://ujcontent.uj.ac.za8080/10210/379972 , uj:7473 , http://hdl.handle.net/10210/8331
  • Description: M.Comm. (Financial Management) , There is a wide perception that bank net interest margins (NIMs) in Sub-Saharan Africa in general and South Africa in particular, are higher compared to other regions. The study investigates four commercial banks in South Africa with the aim of identifying the relevant factors affecting the behaviour of NIMs in commercial banking in South Africa, and draws comparisons with other markets. The study employs the Classical Linear Regression Model (CLRM) using the Ordinary Least Squares (OLS) data estimating technique to analyse net interest margins over the period 2000 to 2010. The study takes note of Ho and Saunders’s seminal work produced in 1981, and subsequent extensions and modification by other authors and researchers. Net interest margins are modeled in a single-step together with explanatory variables driven from the theoretical model. Using data obtained from the Bankscope data base, the variables examined in the study are; competitive structure of the market, average operating costs, management’s propensity for risk aversion, credit risk exposure, the quantum of the bank’s operations, short-term money market interest rate volatility, the opportunity cost of holding reserves and quality of management running the institution. The findings of the study suggest that market power, average operating costs, degree of risk aversion, credit risk exposure, and size of operations are major factors explaining the behaviour of NIMs in South Africa. These variables are major in terms of the number of banks that exhibit statistical significance. Market power, interest rate volatility and opportunity cost of holding reserves are also relevant factors, although they affect fewer banks than the major factors. Comparison of South African net interest margins determinants with those from other regions reveals some fundamental differences. These differences indicate that banks from different countries and regions are faced with different operating environments and risk profiles that drive net interest margins.
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Capital account liberalization and financial institutions: the case of South Africa during the Asian contagion

  • Authors: Maphumulo, Thobelani L.
  • Date: 2012-08-23
  • Subjects: Financial crises - Asia , Capital movements , Finance - South Africa , Banks and banking - South Africa
  • Type: Thesis
  • Identifier: uj:3125 , http://hdl.handle.net/10210/6545
  • Description: M.A. , The objective of this thesis was to discuss capital account liberalization and banking crises in emerging markets, against the backdrop of the Asian financial crisis in 1997. This was discussed with an underlying objective of evaluating the soundness of the South African banking system. The basis of this thesis was that a sound banking system coupled with good macroeconomic policies would make South Africa less vulnerable to global financial volatility. On the East Asian financial crisis, we found that the main cause of this crisis was the lack of prudent lending practices by most banking institutions. Lending practices were largely shaped by institutionalized corruption. Bad lending practices originated from connected lending as banks were owned and had strong links with big family conglomerates. These conglomerates were highly leveraged with very low profit margins and survived on cross-subsidization. As a result, they could not service their debts, resulting in large bad debts and non-performing loans in the banking systems. These non-performing loans and debt defaults had significant negative effects on banks' profitability and business survival, as they eroded earnings and shot up credit exposure. Furthermore, we also found that governments' political influence in the lending system and weak macroeconomic management (large current account deficits, fixed exchange rates and expansionary fiscal policies) contributed significantly to the East Asian financial fragility. Against this background, we recommend that emerging markets that want to liberalize their capital accounts should ensure that sound banking systems are properly entrenched. When financial systems are not strong, emerging countries would be exposed to imprudent credit risk assessments by banking institutions, resulting in nonperforming loans and collapse of those banking institutions. Secondly, our view is that emerging markets should pursue and adhere to the core banking principles of the Basel Committee on Banking Supervision. The objective of these principles is to ensure that banks operate profitably and have good business frameworks. The Basel Committee requires commercial banks to have solid and efficient supervision departments, with strong intentions of evaluating credit risks associated with loans and advances. Furthermore, central banks or any other custodians of banking institutions should have capital adequacy requirements in order to protect depositors and investors against any unforeseen liquidity pressures. From this thesis, we found that the South African banking system is sound. The low level of non-performing loans in the domestic banking system is indicative of prudent credit risk management. Even with prime interest rates at an all time high of 25% in late 1998, most banks managed to escape large non-performing loans, especially from the corporate sector. The brunt was mostly felt in the small business sector and household debt category. The South African Reserve Bank's Supervision Department sets out stringent guidelines with regard to the lending practices of banks. Banks are not allowed to overexpose themselves to particular clients, as was the case in East Asia. This also extends to deposits. Banks are not allowed to take deposits above 25% from a single source. The objective is to guard against liquidity pressures that could occur when that particular depositor withdraws the funding.
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Sensemaking and its influence on a strategic change initiative within an African Bank’s finance function

  • Authors: Isakow, Russell
  • Date: 2017
  • Subjects: Banks and banking - South Africa , Organizational change - South Africa , Strategic planning - South Africa , Corporate culture - South Africa
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/262405 , uj:27699
  • Description: M.Com. (Business Management) , Abstract: Sensemaking is a process through which individuals construct meaning in their lives. This study attempted to validate the use of sensemaking – as a method of inquiry – during the implementation phase of a relevant strategic change initiative. More specifically, the study adopted Tovstiga’s (2015) model for sensemaking from an organisational context, aimed at better understanding how key-stakeholder groups - during the implementation of a strategic change initiative - make sense of the objectives and values of the initiative. Organisational literature has largely focussed on quantitative inquiry, while a qualitative approach (such as with sensemaking as a form of inquiry) can further provide valuable insights for senior management. This study made use of non-probability, purposive sampling, whereby a large African Bank’s Financial Control division was the target population. Within this population, the sample was split between two key stakeholder groups: sensegivers and sensemakers. This provided the researcher with an opportunity to investigate whether the intent (provided by senior management i.e. the sensegivers), aligned with that of the sense made (provided by lower levels of management i.e. the sensemakers). The study used focus group interviews utilising two different interview schedules i.e. one for sensegivers and one for sensemakers. The open-ended questions aimed at better understanding the intent and meaning relating to the strategic change initiative’s objectives and values. The data was then thematically analysed to highlight potential alignments and misalignments of understanding between the two key-stakeholder groups mentioned above. A major finding of this study was that, although the objectives and values identified by lower levels of management mostly aligned with that of the intent by senior management, the sense made did not align. Sensemakers indicated that, due to an unclear vision for the strategic change initiative from senior management, there was confusion as to how to successfully implement the initiative. Additionally, several negative themes emerged from the study i.e. a fear of uncertainty and retrenchment, a feeling of being excluded from the planning of the initiative, and relevant role misunderstandings. The study concluded that sensemaking can be used as a valuable, additional method of inquiry for strategic change initiatives, highlighting important alignments and misalignments from key-stakeholder groups...
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Die belastinghantering van rente, buitelandse valuta en slegte en twyfelagtige skulde deur handelsbanke

  • Authors: Steenkamp, Magda
  • Date: 2012-09-05
  • Subjects: South Africa. Income Tax Act (1962) , Banks and banking - South Africa , Banking law - South Africa , Income tax - South Africa , Interest - Law and legislation - South Africa , Debt - Law and legislation - South Africa
  • Type: Thesis
  • Identifier: uj:3601 , http://hdl.handle.net/10210/6981
  • Description: M.Comm. , Due to uncertainties experienced while working for the South African Revenue Services and the fact that there are no specific sections in the Income Tax Act no. 58 of 1962 dealing with interest, foreign exchange and bad and doubtful debts of commercial banks there were a need to undertake a study. The study therefore undertakes an examination to determine if the existing sections of the Income Tax Act dealing with interest, foreign exchange and bad and doubtful debts are enough legislation to deal with the interest, foreign exchange and bad and doubtful debts of commercial banks. The study also try to clear all existing uncertainties experienced and mentioned in this study. The study can be divided into the following four parts: A literature study of the definition of "bank" and "banking operations", in terms of history and current legislation. A study of the definition of "interest" and "finance charges", in terms of sections of the Income Tax Act, Act no. 58 of 1962 and applicable court cases. The chapter also concentrates on the application of section 24J of the Income Tax Act on the interest-transactions of commercial banks as well as the identification of any short falls of the section. Before interest can be treated in terms of section 24J of the Income Tax Act, the source of the interest will have to be in South Africa. General sourse principles applicable to commercial banks as well as the deductability of interest expenses when expenced to generate exempt income will therefore also be covered in this chapter. A study of the application of section 241 of the Income Tax Act dealing with the foreign exchange of commercial banks. An examination of the way commercial banks should treat their bad and doubtful debts and the factors taken into account in court decisions relating thereto. The most important activities of a bank are identified in this study as the acceptance of deposits, the provision of credit, rendering of financial services and the trade in exchange and the utilisation of money and interest received. In terms of section 24J of the Income Tax Act, interest include finance charges, premiums or disconto's, all interests and the difference between all amounts payable or receivable in terms of a sale and leaseback agreement. It was found that all the interest of a commercial bank are included in the definition of interest and all the transactions of a commercial bank are treated in terms of section 24J of the Income Tax Act for income tax purposes. Section 241 of the Income Tax Act focuses on foreign exchange transactions and are found to be enough legislation for the foreign exchange transactions of commercial banks. Although bad and doubtful debts are not part of the activities of a commercial bank they are part of the uncertainties experienced while working for the South African Revenue Services. During the study it was found that doubtful debts can not be deducted in terms of section 11(a) of the Income Tax Act but only in terms of section 11(j) of the Income Tax Act. It is practice for the South African Revenue Services to only allows 25% of the full amount of doubtful debts, but as this discretion is subject to objection and appeal, the bank is entitled to claim a higher percentage as a deduction if they can provide proveto justify a higher deduction. It was also found that commercial banks can claim their bad debts in term of section 11(a) of the Income Tax Act.
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The impact of optimism on productivity amongst sales banking employees

  • Authors: Tshabuse, N.I.
  • Date: 2018
  • Subjects: Banks and banking - South Africa - Reorganization , Banks and banking - South Africa , Bank employees - South Africa
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://ujcontent.uj.ac.za8080/10210/373509 , http://hdl.handle.net/10210/292405 , uj:31776
  • Description: M.Com. (Business Management) , Abstract: The objective of this study is to examine the impact of optimism on productivity amongst sales employees in the banking industry. Banks in South Africa have evolved over the years due to unpredictable and fast-paced changes in the internal and external environment. Rapid changes in technology and the economy resulted in some banks re-engineering themselves in pursuit of a sustainable competitive advantage. Part of this is augmenting and redefining the focus on human capital. People are no longer just part of the organisation, they can either make or break the organisation. Being a successful salesperson in the banking industry also comes with its own set of challenges, such as the ability to handle repeated rejection. This quantitative cross-sectional study conducted, investigates the correlation between optimism and productivity amongst sales employees. The LOT-R instrument which measures optimism levels, was administered to 180 sales employees in one of the five major banks in South Africa through a face-to-face setting. The optimism items were measured on an ordinal scale which also includes the application of ordinal regression models, a non-parametric Chi-square test, Kendal Coefficient of Concordance, and the contingency Tables. The sales employees’ recent performance ratings were obtained with permission from participants from the HR Department and used to measure the employees’ productivity. The sales manager usually rates employees using the balance scorecard twice a year. The findings confirmed, based on 95% confidence levels, optimism impacts the productivity of sales employees within the South African banking industry. This is similar with other studies conducted previously. The results also showed other demographic factors that also impact the productivity of sales employees.
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Dispute resolution in the banking industry : a comparative analysis of the legal framework in South Africa and Lesotho

  • Authors: Kolobe, Refiloe Marethabile Sylvia
  • Date: 2018
  • Subjects: Dispute resolution (Law) - South Africa , Dispute resolution (Law) - Lesotho , Banks and banking - South Africa , Banks and banking - Lesotho
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/270958 , uj:28810
  • Description: LL.M. (Commercial Law) , Abstract: The clients of the banks in Lesotho are not aware or have little knowledge of the dispute-resolution mechanism that they need to follow when they have a complaint with their banks. This is due to the fact that the Code of Banking Practice in Lesotho is not brought to the attention of the bank’s clients. It is also due to the fact that there are currently no laws aimed at protecting the consumers in Lesotho, so, therefore, consumers when they have a complaint or a dispute with the service providers, resort to litigation which is costly and time consuming. This study is aimed at looking at the way the banking industry in South Africa resolves the disputes between the banks and their clients, and to compare the legal framework of South African dispute-resolution mechanisms to that of Lesotho, which in my view is not effective and efficient. In Lesotho there is no ombudsman for banking services. The Code of Banking Practice in Lesotho simply provides that the client can take its complaints to the Central Bank of Lesotho which currently regulates and supervises the financial institutions in Lesotho. The study investigates the reasons why the Ombudsman for Banking Services was created in South Africa, and considers the advantages and disadvantages of having an independent body to resolve the disputes between a bank and its clients. The purpose of the study is to discover the importance of dispute resolution in the banking industry and also to learn how other jurisdictions conduct their dispute resolution in the banking industry and to make recommendation for developing countries like Lesotho which still lag in this regard.
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The proposed twin-peaks system for regulating the financial sector of South Africa in comparative perspective

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