MD’S MESSAGE
Facing
interesting
times
T
he Banking Association South Africa and Avusa
banks are subject to, and regulations being formulated currently
(Picasso Headline) have partnered to launch The SA
to which they will be subject. There is a plethora of regulations for
Banker. This is the first publication launched by The
banks to deal with. In addition to this, there is a possibility of
Banking Association and I am confident the expertise
a significant overhaul of the regulatory environment, as a result
brought to the partnership by Avusa, together with
of the introduction of the ‘Twin Peaks’ model.
the ability of The Banking Association to source relevant, informaWe are engaging National Treasury and the Registrar of Banks
tive and controversial articles, will offer an exciting publication
extensively on the implementation of the legislation that will flow
sought by key decision-makers in the industry and beyond.
from this. Even though we remained well-capitalised and liquid
The global banking industry has been through a severe crisis, and
through the crisis, we will be subject to regulations under Basel III.
it is still in the midst of very difficult times in Europe and North
These regulations will have serious implications for levels of capital
America. The industry has been criticised, sometimes with
and particularly will have a serious impact on liquidity.
justification, but also unduly so. The period we are in poses
The South African banking sector has to balance
challenges to the banking industry to demonstrate its
the cost of regulation with the imperative, from
my
no
Our eco d by
undoubted relevance to economies, but also to win
both a business and social viewpoint, to broaden
te
contrac
the confidence of clients and ordinary folk in many
and deepen financial services. We are making
parts of the world. I believe we will be the archisignificant progress in this sphere, with innovatects of the future of the banking industry. I also
tive products, collaboration in the regulatory
have no doubt its future is a sustainable one.
sphere, and ongoing improvements.
e worst
h
during t conomic
The South African banking industry rode through
It is therefore clear that the South African
the e
of
the storm of the global financial crisis reasonably well.
banking industry is at an interesting, exciting and
risis.
c
However, the industry was nonetheless affected. Our
challenging juncture. We are also operating during
economy contracted by 6.7% during the worst of the ecoa dynamic political phase in our country, with signifinomic crisis. This led to contraction in business activity, individual
cant challenges there as well.
difficulties in managing debt, and a resultant downturn in banking
The SA Banker will address all of these issues and more, through
business. Despite these conditions, the South African banking
thought-provoking articles and exciting and controversial contriindustry has remained well-capitalised and liquid. There wasn’t
butions from economists, social scientists, bankers, politicians and
a single bank that required any assistance and all banks remained
others. The publication will provide a platform for responsible and
profitable, although with lower ROEs and higher defaults than
open debate on critical issues relevant to the growth and sustainabefore the crisis. The recent annual financial results announced by
bility of the banking sector, the economy and our country.
the major banks demonstrate that the industry has turned the
corner and the demand for loans is gradually increasing.
The South African banking industry is facing a number of
Cas Coovadia
challenges. The most critical of these is the volume of regulation
Managing Director, Banking Association South Africa
6.7%
Edition 1
SA BANKER
7