Graph of the Day - SA securitisation risks well managed: SARB

  Johannesburg, Jul 2 (I-Net Bridge)   Notwithstanding the turmoil experienced in international financial markets and the domestic cyclical economic developments during 2008, the South African banking system again remained stable, said the central bank in a report on Thursday.
   The South African Reserve Bank (SARB) said in Supervision Department’s Annual Report that local banks were adequately capitalised and profitable.
   The report noted that the banking sector’s capital-adequacy ratio increased from 11.8% in January 2008 to 13.0% at the end of December 2008.
   Total banking-sector assets increased from 2,663 billion rand in January 2008 to 3,170 billion at the end of December 2008. The year-on-year growth rate at the end of December 2008 was 24.5% (January 2008: 27.0%).
   Total assets of the four largest banks, amounting to 2,676 billion rand, and accounted for 84.4% of total banking-sector assets.
   Gross loans and advances increased from 2,103 billion rand in January 2008 to 2,316 billion at the end of December 2008. Growth in gross loans and advances (measured year-on-year) eased to 9% at the end of December 2008, compared with 19.2% at the end of January 2008.
   Banking-sector total liabilities amounted to 2,989 billion rand at the end of December 2008 (January 2008: 2,509 billion) and total equity amounted to 181 billion rand (January 2008: 154,4 billion). Deposits represented 79.6% of total liabilities.
   The SARB said deposits from retail and corporate customers remained the primary sources of funding and represented 63.2% of total banking sector deposits at the end of December 2008.
   A study conducted by the Bank noted that securitisation in South Africa was less complicated compared with the US and European countries, and that the assets housed in South African schemes tended to have a high level of transparency.
   “Also, assets securitised had been subjected to credit approval processes similar to that applied to banks’ own credit exposures. Generally, risks related to securitisation schemes were appropriately managed by the banks reviewed,” concluded the SARB.
 
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