Thesis (MBA)--Stellenbosch University, 2000. / ENGLISH ABSTRACT: The Asian financial crisis in mid-1997 highlighted the important role a sound, well
regulated and supervised banking industry plays in the economy of a country or region.
Although many analysts believe that the Asian crisis arose mainly as a result of factors
external to the countries in question, this paper clearly highlights the role fragile banking
industries within these countries played in the crisis.
The Asian financial crisis was not the first of its kind, with similar crises erupting in
Argentina, Mexico and other Latin American countries in the early 1990s. There is a
belief that banking crises occur only in emerging and developing countries. Whilst the
incidence of crises in emerging markets is higher as a result of higher risk profiles, poor
regulation and supervision and government and political interference, the United States
Savings and Loan Crisis of the early 1980s is evidence that banking crises are not limited
to emerging economies.
This study is divided into three parts, namely a theoretical literature study on the
soundness of banking systems, an analysis of the Asian financial crisis and an analysis of
the South African banking industry, with particular reference to the "Big Four" South
African banks. The first part of this study deals with the theory relating to bank soundness, banking in
emerging markets and a brief overview of the various risks faced by banks. A theoretical
study is also undertaken of the causes of and reasons for individual bank failure, as in the
banking industry a crisis of confidence often spills over from an individual bank in
distress to other solvent and well operated banks within the industry. This is known as
the contagion effect.
The second part of the study deals with an in-depth analysis of the causes of the Asian
financial crisis, with specific emphasis on the role banks played in fuelling the crisis.
Recommended solutions are put forward in an attempt to avoid future possible crises of
this magnitude. South Africa is classified as an emerging or developing country by
international economists and therefore is often perceived to pose greater risks to foreign
investors. The third part of this study deals with an in-depth analysis of the soundness of
the South African banking industry concentrating on the financial performance of the
"Big Four" - Amalgamated Banks of South Africa Limited, The First Rand Group,
Nedcor Limited and Standard Bank Investment Corporation Limited. The "Big Four"
make up close to 80% of the total market share of the South African banking industry.
One could imply that if the "Big Four" are financially sound, then the South African
banking industry could be classified as sound. Past experience has revealed that the
failure of a small bank does not have any significant impact on the local banking industry
(i.e. no contagion effect). This study will show that there is no single mathematical model available to analyse the
probability of bank failure or bank system soundness. Rather a wide range of possible
causes, both micro and macro-economic, can influence the soundness of a bank or
banking system.
The study will reflect that although South Africa may be classified as an emerging
economy in view of the characteristics of its economic make-up, the banking industry is
by no means "emerging". South Africa has one of the most highly regulated and
supervised banking industries in the world. Furthermore, whilst maybe not efficient in
terms of utilisation of capital and returns on equity, coupled with fairly high cost
structures, the industry is profitable, with adequate margins, substantial reserves and well
structured loan risk profiles complemented by sound and conservative management
policies, overseen by a highly competent regulatory authority. One could therefore
conclude that given the soundness of the "Big Four", the South African banking system
may be classified as sound. / AFRIKAANSE OPSOMMING: Die Asiatiese finansiële krisis van 1997 het die belangrike rol van 'n gesonde en
gereguleerde bankstelsel in die ekonomie van 'n land of streek beklemtoon. Alhoewel
baie navorsers glo dat die Asiatiese krisis 'n gevolg was van eksterne faktore buite die
beheer van die betrokke nasies, sal hierdie werkstuk klem lê op die rol van wankelrige
bankstelsels in hierdie krisis.
Die Oosterse finansiële krisis was nie enig in soort nie en is soortgelyk aan krisisse in
Agentinië, Mexico en ander Suid-Amerikaanse ekonomië in die vroeë negentigerjare.
Daar is 'n verdere opvatting dat finansiële krisisse beperk is tot ontwikkelende nasies as
gevolg van hierdie lande se hoër risikoprofiel, onvoldoende wetgewing en toesighouding
en politieke inmenging. Tot 'n groot mate is dit wel die geval, maar die 'United States
Savings and Loans' krisis in die tagtigerjare het hierdie wanopvatting bevraagteken.
Hierdie werkstuk is in drie afdelings verdeel - 'n teoretiese navorsingsprojek oor die
stabiliteit van bankstelsels, 'n ontleding van die Asiatiese finansiële krisis en 'n
ontleding van die stabiliteit van die Suid-Afrikaanse bankstelsel met verwysing na die
"Groot Vier" banke.
Die eerste deel van hierdie werkstuk handel oor die teorie van bankstabiliteit, die bankwese in ontwikkelende ekonomië en 'n kort samevatting van die risiko's waaraan
banke blootgestel is.
Teoretiese navorsing word ook gedoen oor die redes en oorsake van individuele
bankmislukkings. Die rede hiervoor is dat 'n vertrouenskrisis in 'n individuele bank
dikwels oorvloei na die gesonde banke binne dieselfde industrie. Die term hiervoor is die
aansteking -effek.
Die tweede deel van hierdie werkstuk dek 'n in-diepte ontleding van die Asiatiese
finansiële krisis, met spesifieke verwysing na die rol van banke in die krisis.
Aanbevelings word verder gemaak in 'n poging om soortgelyke, toekomstige krisisse te
voorkom.
Volgens internasionale ekonome is Suid-Afrika 'n ontwikkelende nasie en hou as sulks
groter risiko's in vir beleggers. Die derde afdeling van hierdie werkstuk dek 'n in-diepte
ontleding oor die stabiliteit van die Suid-Afrikaanse "Groot Vier" banke: Amalgamated
Banks of South Africa Beperk, Die First Rand Groep, Nedcor Groep en Standard Bank
Investment Corporation Beperk. Die "Groot Vier" beslaan 80% van die totale mark van
die Suid-Afrikaanse bankwese. Hiervan kan afgelei word dat sou die "Groot Vier"
finansiële stabiliteit ondervind, dan kan die Suid-Afrikaanse bankwese met reg as gesond
beskou word. Ondervinding in Suid-Afrika het gewys dat die mislukking van 'n klein
bank nie 'n groot invloed op die plaaslike bankwese het nie (die aansteking - effek). Hierdie werkstuk sal aantoon dat daar geen wiskundige of ekonomiese model beskikbaar
is om 'n bankmislukking vroegtydig en korrek te voorspel nie - ook nie om die stabiliteit
van 'n bankstelsel te waarborg nie. 'n Wye reeks moontlike oorsake, beide mikro- en
makro-ekonomies van aard, kan die stabiliteit van 'n bank of die bankwese beïnvloed.
Hierdie werkstuk sal deurlopend uitwys dat nieteenstaande Suid-Afrika se status as
"ontwikkelende" nasie, die bankwese allermins "ontwikkelend" is. Suid-Afrika het een
van die mees gereguleerde bankstelsels in die wêreld. Terwyl die aanwending van
kapitaal en die opbrengs daarop nie altyd bevredigend is nie, is die opbrengs vir beleggers
redelik hoog en die industrie winsgewend. Winsmarges is groot, diepte in reserves is
duidelik teenwoordig en die korrekte, gestruktureerde risiko profiel van leners weerspieël
stabiele en konserwatiewe bestuurspraktyke. Samevattend kan gesê word dat danksy die
"Groot Vier", die Suid-Afrikaanse bankwese kerngesond is.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/51576 |
| Date | 03 1900 |
| Creators | Edwards, Richard John |
| Contributors | Burger, J., Stellenbosch University. Faculty of Economic & Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | 171 p. |
| Rights | Stellenbosch University |
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