scholarly journals Structure and profitability in the banking sector

2018 ◽  
Vol 13 (1) ◽  
pp. 49-59 ◽  
Author(s):  
Munacinga Simatele ◽  
Syden Mishi ◽  
Nomasomi Ngonyama
Keyword(s):  
Market Structure ◽  
South African ◽  
Market Share ◽  
Positive Relationship ◽  
Banking Sector ◽  
The South ◽  
Policy Makers ◽  
Structure Relationship ◽  
Bank Market Structure ◽  
The Relationship

The relationship between profit and bank market structure continues to raise questions amongst both policy makers and researchers. While some evidence supports a positive relationship between market structure, competition and profitability, other evidence seems to support the fact that profitability and related market share result from efficiency. Moreover, extant literature on South Africa is conflicting and seems to contradict anecdotal evidence. While some studies point to a competitive environment despite concentration, others suggest that concentration in the banking sector is harmful. Prosecution of banks for uncompetitive behavior also casts doubt on the conclusion that the South African banking sector is competitive. This paper examines the relationship between structure and conduct in the South African banking sector. Using the Berger (1995) discriminating tests, the effect of industry concentration, market share and efficiency on three measures of profitability is estimated on a panel of 11 South African banks for data between 1994 and 2016. The results show that concentration affects conduct. The profit-structure relationship is dominantly explained by the structure conduct hypothesis and partly by the efficient scale hypothesis. These results suggest that policy which discourages concentration and promotes competition in the banking sector is socially beneficial.

scholarly journals The relationship between return on investment and the market share of certain listed companies in selected market sectors: 1975 - 1985

1988 ◽  
Vol 19 (3) ◽  
pp. 85-89
Author(s):  
P. W.C. De Wit ◽  
N. J.R. Steyn
Keyword(s):  
Empirical Study ◽  
South African ◽  
Market Share ◽  
Return On Investment ◽  
Positive Relationship ◽  
Theoretical Study ◽  
Future Research ◽  
Meaningful Relationship ◽  
The Relationship ◽  
A Company

During a theoretical study of company objectives it was found that it is generally assumed that a positive relationship exists between return on investment and the market share of a company. Examination of the formula for calculating return on investment shows, however, that this may not necessarily be the case. As existing studies regarding this relationship could not give any clarity, the need arose for a South African based study. An empirical study was accordingly executed on listed retail stores and companies involved in the manufacturing and distribution of furniture. The period involved was 1975-1985. No meaningful relationship between return on investment and market share could be found. Various recommendations that may lead to more conclusive results during future research were made. The need for accurate findings exists to establish whether the marketing objective is in line with the company objective.

scholarly journals Measuring the systemic risk in the South African banking sector

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Gregory M. Foggitt ◽  
Andre Heymans ◽  
Gary W. Van Vuuren ◽  
Anmar Pretorius
Keyword(s):  
Financial Crisis ◽  
South African ◽  
Systemic Risk ◽  
Banking Sector ◽  
Risk Index ◽  
Financial Sector ◽  
Ethical Behaviour ◽  
The South ◽  
Case Scenario ◽  
Worst Case

Background: In the aftermath of the sub-prime crisis, systemic risk has become a greater priority for regulators, with the National Treasury (2011) stating that regulators should proactively monitor changes in systemic risk.Aim: The aim is to quantify systemic risk as the capital shortfall an institution is likely to experience, conditional to the entire financial sector being undercapitalised.Setting: We measure the systemic risk index (SRISK) of the South African (SA) banking sector between 2001 and 2013.Methods: Systemic risk is measured with the SRISK.Results: Although the results indicated only moderate systemic risk in the SA financial sector over this period, there were significant spikes in the levels of systemic risk during periods of financial turmoil in other countries. Especially the stock market crash in 2002 and the subprime crisis in 2008. Based on our results, the largest contributor to systemic risk during quiet periods was Investec, the bank in our sample which had the lowest market capitalisation. However, during periods of financial turmoil, the contributions of other larger banks increased markedly.Conclusion: The implication of these spikes is that systemic risk levels may also be highly dependent on external economic factors, in addition to internal banking characteristics. The results indicate that the economic fundamentals of SA itself seem to have little effect on the amount of systemic risk present in the financial sector. A more significant relationship seems to exist with the stability of the financial sectors in foreign countries. The implication therefore is that complying with individual banking regulations, such as Basel, and corporate governance regulations promoting ethical behaviour, such as King III, may not be adequate. It is therefore proposed that banks should always have sufficient capital reserves in order to mitigate the effects of a financial crisis in a foreign country. The use of worst-case scenario analyses (such as those in this study) could aid in determining exactly how much capital banks could need in order to be considered sufficiently capitalised during a financial crisis, and therefore safe from systemic risk.

Unraveling the South African Breast Cancer Story: The Relationship of Patients, Delay to Diagnosis, and Tumor Biology With Stage at Presentation in an Urban Setting

2019 ◽  
Vol 235 ◽  
pp. 181-189
Author(s):  
Sarah Rayne ◽  
Kathryn Schnippel ◽  
Surbhi Grover ◽  
Kirstin Fearnhead ◽  
Deirdre Kruger ◽  
...  
Keyword(s):  
Breast Cancer ◽  
South African ◽  
Tumor Biology ◽  
Urban Setting ◽  
The South ◽  
Relationship Of ◽  
The Relationship

scholarly journals An Analysis of a supervisor-subordinate trust relationship

2000 ◽  
Vol 26 (1) ◽  
Author(s):  
A. S. Engelbrecht ◽  
B. E. Cloete
Keyword(s):  
Conceptual Model ◽  
South African ◽  
Positive Relationship ◽  
Interpersonal Trust ◽  
Organizational Trust ◽  
Moderating Effect ◽  
Work Context ◽  
The South ◽  
Trust Relationship ◽  
Trust Relationships

In view of the importance of interpersonal trust as recognized by organizational scholars and the problems associated with the study of trust in organizations, the development of a conceptual model of organizational trust is essential. The aim of this study was to establish empirically the validity of a theoretically sound model of trust in the South African work context. The overall results confirmed a positive relationship between interpersonal trust, trustworthiness and successful trust relationships. The propensity to trust, as well as the length of the supervisorsubordinate relationship, however, did not prove to have a moderating effect on trustworthiness. Opsomming In die lig van die belangrike rol wat navorsers aan vertroue heg en die probleme verbonde aan die bestudering van vertroue in organisasies, is die ontwikkeling van'n konseptuele model van organisatoriese vertroue essensieel. Die doel van hierdie studie was om empiries te bepaal of 'n teoreties gefundeerde model van vertroue in die Suid-Afrikaanse werkskonteks geldig is. In die algemeen bevestig die resultate die bestaan van n beduidend positiewe verband tussen interpersoonlike vertroue, vertrouenswaardigheid en n suksesvolle vertrouensverhouding. Vertrouensgeneigdheid sowel as lengte van toesighouerondergeskikte verhouding het egter nie 'n moderende invloed op vertrouenswaardigheid getoon nie.

scholarly journals Selection criteria in the South African retail banking sector

2012 ◽  
Vol 6 (41) ◽  
pp. 10558-10567 ◽  
Author(s):  
Coetzee Johan ◽  
van Zyl Helena ◽  
Tait Madeacute le
Keyword(s):  
South African ◽  
Selection Criteria ◽  
Banking Sector ◽  
Retail Banking ◽  
The South

scholarly journals Community structure and centrality effects in the South African company network

2013 ◽  
Vol 44 (2) ◽  
pp. 35-43 ◽  
Author(s):  
I. Durbach ◽  
D Katshunga ◽  
H. Parker
Keyword(s):  
Community Structure ◽  
Social Network ◽  
South African ◽  
Stock Exchange ◽  
The South ◽  
Market Capitalization ◽  
Johannesburg Stock Exchange ◽  
The Relationship

This paper conducts a search for community structure in the South African company network, a social network whose elements are South African companies listed on the Johannesburg Stock Exchange. Companies are connected in this network if they share one or more directors on their respective boards. Discovered clusters, called communities, can be considered to be compartments of the network working relatively independently of one another, making their distribution and composition of some interest. We test whether the discovered communities of companies are (a) statistically significant, and (b) related to other attributes such as sector membership or market capitalization. We also investigate the relationship between the centrality of a company’s position in the network and its market capitalization.

Market structure-performance hypothesis in Kenyan banking industry

2015 ◽  
Vol 10 (4) ◽  
pp. 697-710 ◽  
Author(s):  
Solomon W. Giorgis Sahile ◽  
Daniel Kipkirong Tarus ◽  
Thomas Kimeli Cheruiyot
Keyword(s):  
Market Structure ◽  
Market Efficiency ◽  
Market Share ◽  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Developing Economies ◽  
Market Concentration ◽  
Bank Performance ◽  
Content Type

Purpose – The purpose of this paper is to test market structure-performance hypothesis in banking industry in Kenya. Specifically, the structure-conduct-performance (SCP) and market efficiency hypotheses were examined to determine how market concentration and efficiency affect bank performance in Kenya. Design/methodology/approach – The study used secondary data of 44 commercial banks operating from 2000 to 2009. Three proxies to measure bank performance were used while market concentration and market share were used as proxies for market structure. Market concentration was measured using two concentration measures; the concentration ratio of the four largest banks (CR4) and Herfindahl-Hirschman Index, while market share was used as a proxy for efficiency. The study made use of generalized least square regression method. Findings – The empirical results confirm that market efficiency hypothesis is a predictor of firm performance in the banking sector in Kenya and rejects the traditional SCP hypothesis. Thus, the results support the view that efficient banks maximize profitability. Practical implications – The study provides insights into the role of efficiency in enhancing profitability in commercial banks in Kenya. It has managerial implication that profitable banks ought to be efficient and dispels the notion of collusive behavior as a precursor for profitability. Originality/value – The paper fills an important gap in the extant literature by proving insights into what determines bank profitability in banking sector in Kenya. Although this area is rich in research, little work has been conducted in the developing economies and in particular no study in the knowledge has addressed this critical issue in Kenya.

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