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Vicarious liability of banks for fraudulent conduct of their employees

  • Authors: Van der Linde, Carien
  • Date: 2015-07-14
  • Subjects: Banks and banking - South Africa , Fraud - South Africa , Bank employees - South Africa , Accounting fraud - South Africa , Liability (Law) - South Africa
  • Type: Thesis
  • Identifier: uj:13708 , http://hdl.handle.net/10210/13973
  • Description: LL.M. (Banking Law) , When a bank employee commits fraudulent acts within the course and scope of his employment, he renders the bank vicariously liable for his fraud. The logical conundrum is that since a bank never employs someone to commit fraud, and since fraud is thus never in this sense within the course and scope of his employment, should the bank never be liable for this fraudulent conduct? If this were the law, the public could potentially be defrauded with impunity, because those defrauded would be left only with a claim against a fraudster who likely has no assets. This dissertation examines the common-law doctrine of vicarious liability and illustrates the sometimes-haphazard manner in which courts have applied the underlying principle to the varying facts that arise. It will be shown that the application of the doctrine to cases involving fraud by bank employees is particularly inconsistent and unsatisfactory. It will be proposed that the solution lies in the development of the common law so as to promote the spirit, purport and objects of the Bill of Rights, and particularly section 25 of the Constitution. 2 This paragraph conceptualises the vicarious liability doctrine. Paragraph 2 considers the application of the doctrine by the courts, and points to inconsistencies in approach. The third paragraph deals briefly with the position in two common-law jurisdictions, Canada and Britain. The final paragraph proposes a solution to the observed inconsistencies: an employee acts in the course and scope of his employment for purposes of imposing vicarious liability when the employer’s right not to be arbitrarily deprived of his property in terms of section 25 of the Constitution is acknowledged, and his vicarious liability is limited to cases where there is a rational relationship between the employee’s fraudulent conduct and the scope of his employment, and not an arbitrary deprivation. In considering the South African cases, it readily becomes apparent that the courts have already instinctively adopted the approach of examining the nature and extent of the deviation by the employee from the scope of his employment, but have not done so in the context of the property clause ...
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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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Toepasbaarheid van 'n mededingende voordeelmodel binne die internasionale afdeling van 'n handelsbank

  • Authors: Fourie, Louis
  • Date: 2014-02-18
  • Subjects: Competition, International , Merchant banks - South Africa , Banks and banking - South Africa
  • Type: Thesis
  • Identifier: uj:4116 , http://hdl.handle.net/10210/9463
  • Description: M. Com , The 200 years of South African banking history has been a turbulent mix of crisis and triumph. Banks have had to respond to changes in their environment ranging from wars and the discovery of gold and diamonds, to regulatory changes, disinvestment and township bond boycotts. With the phasing out of sanctions, international opportunities started to emerge and South African banks were quick to respond. International and local competition has increased and it has become necessary for banks to put more emphasis on obtaining a competitive advantage. Optimists like to speak of South Africa as the "powerhouse of Africa" and the natural investment home for foreign investors wanting a foothold in the African market. It has therefore become necessary to do a "SWOT" analysis (Strengths and weaknesses, opportunities and threats) to be able to formulate a competitive strategy. • This dissertation comprises of an environmental analysis which includes a study of the macro-environment, international environment and the analysis of Porter's five basic forces. This environmental analysis leads to the establishing of local and international competitive strategies. South Africa has a competitive edge on other countries of its size and development levels in the sense that it has a very adaptable economy. The fact that South Africa is seen as the "gateway to Africa" should be exploited by South African banks. The changing and uncertain environment in South Africa must be seen as an opportunity for international departments of commercial banks to enrich themselves and their employees. This dissertation has shown that local banks do not have an advantage over international banks. From this follows a recommendation that local banks should develop and maintain a competitive advantage and focus on African business.
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The proposed twin-peaks system for regulating the financial sector of South Africa in comparative perspective

The performance of Shariah compliant investment funds in South Africa

The management of banks in South Africa : legal and governance principles

  • Authors: De Jager, Johannes Jurgens
  • Date: 2012-08-14
  • Subjects: Corporate governance - Law and legislation - South Africa , Corporation law - South Africa , Banks and banking - South Africa
  • Type: Thesis
  • Identifier: uj:9205 , http://hdl.handle.net/10210/5655
  • Description: LL.D. , Banks are important institutional mechanisms in local and international markets. In general a bank is required to fulfil the important function, inter a/ia, of collecting the general public's savings and channelling it into productive investments in the economy. As part of this process a bank subjects mainly depositors' funds to various types of risk in an endeavour to generate profits. It results in the level of risk exposure assumed by the bank normally being much higher than the actual level of the bank's capital. This gearing effect may unfortunately act as an incentive for directors and management ("management") of a bank to subject depositors' funds to outrageous risks in a quest to earn extraordinary profits. Under such circumstances the chances of gain may be unreasonably small in comparison with the high probability of loss of the depositors' funds and the (possible) failure of the bank. In addition, the danger exists that the failure of a bank may cause the demise of other banks or may even result in the failure of whole financial systems. Therefore, in view of the worldwide expansion of banks, the Bank for International Settlements (together with other international bodies) is involved in developing and maintaining uniform international minimum standards of supervision on a global scale. Regulators worldwide are required to adhere to these standards if the banks in their jurisdictions are to participate in the international financial markets. In South Africa, the Banks Act, 1990 (Act No. 94 of 1990), provides for the regulation and supervision of banks, which banks (other than branches of foreign banks and mutual banks) are required to be public companies. This company structure offers persons who are equipped with special managerial abilities and skills the opportunity to manage and control the company's business. Accordingly, the worldwide phenomenon of the separation between the shareholders and management of the company (concomitant with virtually unlimited managerial freedom) extant in large public companies exacerbates the risk of the loss of deposits occasioned by negligence or misdemeanour on the part of management of banks. Moreover, market forces and principles of South Africa's statutory and common law pertaining to the duties of management fail to provide the necessary system of countermeasures to guard against the exploitation by management of the business of a bank and to reduce the risk of loss to depositors. Consequently, considerations of public interest dictate that the principles of a free-market economy be supplanted by legislation that introduces prescriptive rules with regard to the regulation and governance of the management of banks. The purpose of such legislation should be to rectify market failures and to protect the interests of depositors. It must also provide the Registrar of Banks with an adequate structure to oversee compliance with international minimum standards of regulation and governance pertaining to the management of banks. In this vein, the study undertaken in this thesis has resulted in draft pro forma legislation aimed at addressing the designated needs and standards. Should legislation of this nature be introduced and applied to the management of banks in South Africa, it would not only ensure compliance with internationally recognised regulatory and governance standards, but should also protect the interests of depositors. The proposed legislation ought to minimise the risk of the loss of deposits and should contribute towards maintaining/restoring the confidence of the general public in the financial system of South Africa. It would also enhance the process of ensuring that only fit and proper persons are appointed as managers, and continue to manage a bank and/or bank controlling company. The pro forma legislation is designed to be enacted as amendments to the current provisions of the Banks Act.
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The impact of the National. Credit Act (NCA) on risk in the South African banking system

  • Authors: Landie, Denzel
  • Date: 2014-06-10
  • Subjects: Financial risk management - South Africa , Banks and banking - Risk management - South Africa , Banks and banking - South Africa , South Africa. National Credit Act, 2005
  • Type: Thesis
  • Identifier: uj:11479 , http://hdl.handle.net/10210/11175
  • Description: M.Phil. (Economics) , There has been increasing focus on banking system stability worldwide, particularly due to the recent financial crisis experienced and the resultant adverse economic effects. In the case of a developing country like South Africa (SA), the stability of the banking system is even more important as it is crucial for the achievement of the country’s development goals. Credit extension is also a core component for facilitating economic and social development in the country. The downside risk attached to credit extension is that once it reaches a point of being excessive it can have a destabilising effect on the banking system and the economy. SA has experienced a rapid increase in credit extension since 2001, which prompted the implementation of the National Credit Act (NCA), with the intention of regulating the credit industry and improving the practices therein. More recently, further concerns have been raised by regulatory authorities around the possibility of an asset bubble in the SA economy as a result of the level of unsecured credit extended in the country. The objective of this study therefore is to investigate the impact of the NCA on risk, both credit and systemic, in the banking system. This is important, as investigating and understanding the impact of credit controls, like the NCA, on risk in the banking system is critical to supporting the SA development agenda. The findings of this study show that the NCA has been successful in reducing credit risk in the banking system, even though this was by default and not through the stated intention of the Act. This was achieved through the introduction of the affordability requirement into the credit assessment process. This study highlights however, that there are still areas of improvement which can be made to the NCA to increase its effectiveness in preventing excessive credit extension.
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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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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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The impact of enterprise development value proposition on small and micro enterprise growth

  • Authors: Makhubele, Teleni Abigail
  • Date: 2015-09-01
  • Subjects: Small business - South Africa - Finance , Banks and banking - South Africa
  • Type: Thesis
  • Identifier: uj:14013 , http://hdl.handle.net/10210/14385
  • Description: M.Com. , Small, medium and micro enterprise (SMME) prioritization is a collaborative effort by both the government and the private sector. The SA government called for support through the 1995 White Paper on National Strategy for the Development and Promotion of Small Business. The recent establishment (May 2014) of the Ministry of Small Business Development reinforces the strategic role of SMMEs in the South African economy. The prominent role played by SMMEs cannot be overemphasized...
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The identification and verification of clients by banks in South Africa : a Financial Intelligence Centre Act requirement

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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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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The effect of non-interest income on the profitability of South African commercial banks

  • Authors: Amod, Farah
  • Date: 2016
  • Subjects: Banks and banking - South Africa
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/237194 , uj:24300
  • Description: M.Com. (Finance) , Abstract: Banking in emerging markets has recently seen a decline in traditional interest earning activities towards newer diversified business strategies that yield noninterest revenue. This change has been provoked by numerous factors, the most prevalent being the rate of technological and structural advancement as well as the heightened post-financial crises focus on mitigating interest rate risk and credit risk exposure. This study investigated whether the observed shift into activities that generate noninterest revenue (NIR) rather than net interest income (NII), improves financial performance. Previous research in this regard offers varying results across the globe and is specifically limited for the South African context. The results of this study aims to close the gap and thereby influence decision and policy makers within the South African banking industry to strategise appropriately taking into account the significant drivers of financial performance. Secondary data was obtained for a sample of four of South Africa’s largest banks, for periods both before and after the 2007/8 financial crisis. A quantitative research inquiry approach was followed incorporating both regression and correlation analysis. The results found that banks with higher NIR to gross revenue percentages exhibit better performance and that NIR is largely a significant determinant of that performance. NIR was also found to exhibit negative correlation to NII, emphasising the credibility of NIR as a means of diversification for South African banks.
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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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The code of banking practice : an investigation into its role and enforceability in South African Banking Law

  • Authors: Xavier, Edi Espírito Santo
  • Date: 2016
  • Subjects: Banking law - South Africa , Banks and banking - South Africa , Financial services industry - South Africa
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/90603 , uj:20000
  • Description: Abstract: The date of commencement of the current version of the Code of Banking Practice (“the Code”) was 1 January 2012. Although, the Banking Association of South Africa had drafted a code as far back as 3 April 2000, the first Code of Banking Practice commenced (and bound all members of the banking association) on 1 October 2004. The Code was amended on two further occasions into its current version. Accordingly, all member banks of the Bankers Association have committed themselves to apply, and abide by, the Code. The provisions of the Code provide for, amongst other things, the standards for conduct expected by the banks when dealing with their clients. The Code can best be described as an enigma within the context of South African banking law. The aim of this work is to investigate the role and enforceability of the Code in South Africa. Closely associated with the Code is the office of the Ombudsman for Banking Services which was established to, amongst other things, oversee compliance with the Code. Where it exercises jurisdiction, the Ombudsman acts as an alternative dispute resolution agent in resolving disputes between banks and clients. The applicability of the Code in resolving disputes between banks and their clients depends on several factors, including the type of client, the nature of the dispute and the amount involved. If regard is had to the provisions of the Code, which the writer submits are to a large extent geared towards the benefit of the client, it is surprising that same has hardly been considered by our courts when adjudicating matters and disputes pertinent to South African banking law, and more particularly matters regarding the bank-client relationship, especially considering the deluge of cases heard on a daily basis in South African courts regarding disputes between banks and their clients. The purpose of this work is to investigate the origins of the Code and aspects associated therewith, and, in light thereof, to investigate the role and enforceability of the Code in South African banking law bearing in mind aspects such as legislative developments as well as to elaborate on certain comparative analyses with foreign law... , LL.M. (Banking Law)
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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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Spillover effects of a sovereign credit downgrade within the South African retail banking sector

  • Authors: De Wet, Milan
  • Date: 2018
  • Subjects: Banks and banking - South Africa , Credit ratings - South Africa , Credit analysis - South Africa
  • Language: English
  • Type: Masters (Thesis)
  • Identifier: http://hdl.handle.net/10210/272019 , uj:28942
  • Description: M.Com. (Investment Management) , Abstract: The increasing role of credit rating agencies in emerging markets and the various impacts that these rating agencies have on emerging market economies have become of great interest in modern finance. The main aim of this study is to determine the spillover effects of a South African sovereign credit rating downgrade on the South African retail banking sector. The four objectives of this study are: to determine whether a sovereign ceiling channel exists between the South African sovereign credit rating and the corporate credit ratings of the retail banks under analysis; to determine the effects of a South African sovereign credit rating downgrade on the share price of each bank under analysis by means of determining whether a South African sovereign credit rating downgrade caused any significant abnormal returns in the share price; to establish whether a South African sovereign credit rating change caused any volatility spillovers to the shares of the banks under analysis; and, finally, to ascertain whether a South African sovereign credit rating change had a significant impact on the fundamental variables of the banks under analysis. By making use of regression methodology it is shown that a sovereign ceiling channel exists between the South African sovereign credit rating and the corporate credit ratings of South African retail banks. Furthermore, an event study analysis was conducted to provide evidence that a South African sovereign credit rating downgrade does cause abnormal returns in the shares of South African retail banks. It is also presented by means of a GARCH-BEKK model that South African sovereign credit rating changes caused volatility spillovers to the shares of South African retail banks. Finally, despite the negative share price effect of a South African sovereign credit rating downgrade, ARDL methodology provided evidence that a South African sovereign credit rating change does not always have a significant impact on key fundamental aspects of South African retail banks.
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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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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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