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"Expanding on the strength of the banking sector, he said a recent global competitiveness report by the World Economic Forum had ranked SA first for re..."
Nedbank CEO Mike Brown said last week that SA’s banking sector remained largely unshaken by the turmoil in Europe although the spectre of a double-dip recession could affect local confidence.
Speaking at an end-of-year function for the media in Sandton, Mr Brown said unlike their peers in the developed world, South African banks had robust and well-capitalised balance sheets and were not exposed to the euro- zone periphery where Greece is battling to avoid a default on its public debt.
He said Nedbank’s core tier capital was close to 11%, well above the minimum regulatory threshold of about 9% being demanded by Basel 3 regulators who are demanding tighter capital ratios because of the effect of the last financial crisis.
Expanding on the strength of the banking sector, he said a recent global competitiveness report by the World Economic Forum had ranked SA first for regulation of the securities exchange, first for the strength of auditing and reporting standards, and second for soundness of banks, coming second after Canada, with the US falling to 111 out of about 142 countries surveyed.
However, he admitted that Nedbank and other banks were desperate for "decent" income growth to make up for soft net interest revenue that has been hit by the negative endowment effect of low interest rates.
Mr Brown said Nedbank was growing its noninterest income as part of a strategy started a few years ago to widen its revenue base. He said banks in the US had used "weapons of mass financial destruction" such as subprime assets to engage in reckless trading that resulted in the financial crisis, which eventually "morphed into global recession".
Speaking at an end-of-year function for the media in Sandton, Mr Brown said unlike their peers in the developed world, South African banks had robust and well-capitalised balance sheets and were not exposed to the euro- zone periphery where Greece is battling to avoid a default on its public debt.
He said Nedbank’s core tier capital was close to 11%, well above the minimum regulatory threshold of about 9% being demanded by Basel 3 regulators who are demanding tighter capital ratios because of the effect of the last financial crisis.
Expanding on the strength of the banking sector, he said a recent global competitiveness report by the World Economic Forum had ranked SA first for regulation of the securities exchange, first for the strength of auditing and reporting standards, and second for soundness of banks, coming second after Canada, with the US falling to 111 out of about 142 countries surveyed.
However, he admitted that Nedbank and other banks were desperate for "decent" income growth to make up for soft net interest revenue that has been hit by the negative endowment effect of low interest rates.
Mr Brown said Nedbank was growing its noninterest income as part of a strategy started a few years ago to widen its revenue base. He said banks in the US had used "weapons of mass financial destruction" such as subprime assets to engage in reckless trading that resulted in the financial crisis, which eventually "morphed into global recession".
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