scholarly journals An analysis of competition, efficiency and soundness in the South African banking sector

Author(s):  
Busani Moyo

Background: The banking sector plays an important role in economic activity: it mobilises savings and channels them to productive sectors thus encouraging the efficient allocation of resources. The competitive nature of the environment under which the banking sector operates is of paramount importance.Aim: The main aim of this study was to investigate the relationship between competition, efficiency and soundness in the South African banking sector.Setting: The setting for this study was the South African banking sector.Methods: We used a data set of 17 local and international banks for the period 2004–2015 and stochastic frontier models to analyse efficiency.Results: Results show that the impact of competition on efficiency depended on the measure of competition used. When using the Lerner index there was a negative effect of competition on efficiency while the opposite was true when using the theoretically robust Boone indicator.Conclusion: In the case of bank soundness, competition using the Boone indicator is negatively related to the Z score, implying that competition enhances bank soundness and these results supported the prudent and efficient management hypothesis.

2015 ◽  
Vol 20 (4) ◽  
pp. 427-451 ◽  
Author(s):  
Erica Chenoweth ◽  
Kurt Schock

Civil resistance is a powerful strategy for promoting major social and political change, yet no study has systematically evaluated the effects of simultaneous armed resistance on the success rates of unarmed resistance campaigns. Using the Nonviolent and Violent Conflict Outcomes (NAVCO 1.1) data set, which includes aggregate data on 106 primarily nonviolent resistance campaigns from 1900 to 2006 with maximalist political objectives, we find that contemporaneous armed struggles do not have positive effects on the outcome of nonviolent campaigns. We do find evidence for an indirect negative effect, in that contemporaneous armed struggles are negatively associated with popular participation and are, consequently, correlated with reduced chances of success for otherwise-unarmed campaigns. Two paired comparisons suggest that negative violent flank effects operated strongly in two unsuccessful cases (the 8-8-88 challenge in Burma in 1988 and the South African antiapartheid challenge from 1952 to 1961, with violent flanks having both positive and negative impacts in the challenge to authoritarian rule in the Philippines (1983–1986) and the South African antiapartheid campaign (1983–1994). Our results suggest that the political effects are beneficial only in the short term, with much more unpredictable and varied long-term outcomes. Alternately, violent flanks may have both positive and negative political impacts, which make the overall effect of violent flanks difficult to determine. We conclude that large-scale maximalist nonviolent campaigns often succeed despite intra- or extramovement violent flanks, but seldom because of them.


2014 ◽  
Vol 30 (4) ◽  
pp. 1183 ◽  
Author(s):  
Christopher Ifeacho ◽  
Harold Ngalawa

This study investigates the impact of bank-specific variables and selected macroeconomic variables on the South African banking sector for the period 1994-2011 using the capital adequacy, asset quality, management, earnings, and liquidity (CAMEL) model of bank performance evaluation. The study employs data in annual frequency from South Africas four largest banks, namely, ABSA, First National Bank, Nedbank, and Standard Bank. These banks account for over 70% of South Africas banking assets. Using return on assets (ROA) and return on equity (ROE) as measures of bank performance, the study finds that all bank-specific variables are statistically significant determinants of bank performance. Specifically, the study shows that asset quality, management quality, and liquidity have a positive effect on both measures of bank performance, which is consistent with a priori theoretical expectations. Capital adequacy, however, exhibits a surprising significant negative relationship with ROA, while its relationship with ROE is significant and positive as expected. Except for interest rates (in the ROA model), unemployment rate (in the ROA model), and the rate of inflation (in the ROE model), the rest of the macroeconomic variables are statistically insignificant. The study reveals that bank performance is positively related to interest rates and negatively related to unemployment rates and interest rates.


2020 ◽  
Author(s):  
Neven Chetty ◽  
Bamise Adeleye ◽  
Abiola Olawale Ilori

BACKGROUND The impact of climate temperature on the counts (number of positive COVID-19 cases reported), recovery, and death rates of COVID-19 cases in South Africa's nine provinces was investigated. The data for confirmed cases of COVID-19 were collected for March 25 and June 30, 2020 (14 weeks) from South Africa's Government COVID-19 online resource, while the daily provincial climate temperatures were collected from the website of the South African Weather Service. Our result indicates that a higher or lower climate temperature does not prevent or delay the spread and death rates but shows significant positive impacts on the recovery rates of COVID-19 patients. Thus, it indicates that the climate temperature is unlikely to impose a strict limit on the spread of COVID-19. There is no correlation between the cases and death rates, an indicator that no particular temperature range is closely associated with a faster or slower death rate of COVID-19 patients. As evidence from our study, a warm climate temperature can only increase the recovery rate of COVID-19 patients, ultimately impacting the death and active case rates and freeing up resources quicker to enable health facilities to deal with those patients' climbing rates who need treatment. OBJECTIVE This study aims to investigate the impact of climate temperature variation on the counts, recovery, and death rates of COVID-19 cases in all South Africa's provinces. The findings were compared with those of countries with comparable climate temperature values. METHODS The data for confirmed cases of COVID-19 were collected for March 25 and June 30 (14 weeks) for South African provinces, including daily counts, death, and recovery rates. The dates were grouped into two, wherein weeks 1-5 represent the periods of total lockdown to contain the spread of COVID-19 in South Africa. Weeks 6-14 are periods where the lockdown was eased to various levels 4 and 3. The daily information of COVID-19 count, death, and recovery was obtained from South Africa's Government COVID-19 online resource (https://sacoronavirus.co.za). Daily provincial climate temperatures were collected from the website of the South African Weather Service (https://www.weathersa.co.za). The provinces of South Africa are Eastern Cape, Western Cape, Northern Cape, Limpopo, Northwest, Mpumalanga, Free State, KwaZulu-Natal, Western Cape, and Gauteng. Weekly consideration was given to the daily climate temperature (average minimum and maximum). The recorded values were considered, respectively, to be in the ratio of death-to-count (D/C) and recovery-to-count (R/C). Descriptive statistics were performed for all the data collected for this study. The analyses were performed using the Person’s bivariate correlation to analyze the association between climate temperature, death-to-count, and recovery-to-count ratios of COVID-19. RESULTS The results showed that higher climate temperatures aren't essential to avoid the COVID-19 from being spread. The present results conform to the reports that suggested that COVID-19 is unlike the seasonal flu, which does dissipate as the climate temperature rises [17]. Accordingly, the ratio of counts and death-to-count cannot be concluded to be influenced by variations in the climate temperatures within the study areas. CONCLUSIONS The study investigates the impact of climate temperature on the counts, recovery, and death rates of COVID-19 cases in all South Africa's provinces. The findings were compared with those of countries with comparable climate temperatures as South Africa. Our result indicates that a higher or lower climate temperature does not prevent or delay the spread and death rates but shows significant positive impacts on the recovery rates of COVID-19 patients. Warm climate temperatures seem not to restrict the spread of the COVID-19 as the count rate was substantial at every climate temperatures. Thus, it indicates that the climate temperature is unlikely to impose a strict limit on the spread of COVID-19. There is no correlation between the cases and death rates, an indicator that there is no particular temperature range of the climatic conditions closely associated with a faster or slower death rate of COVID-19 patients. However, other shortcomings in this study's process should not be ignored. Some other factors may have contributed to recovery rates, such as the South African government's timely intervention to announce a national lockout at the early stage of the outbreak, the availability of intensive medical care, and social distancing effects. Nevertheless, this study shows that a warm climate temperature can only help COVID-19 patients recover more quickly, thereby having huge impacts on the death and active case rates.


Author(s):  
Gregory M. Foggitt ◽  
Andre Heymans ◽  
Gary W. Van Vuuren ◽  
Anmar Pretorius

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.


Author(s):  
Bethuel Ngcamu ◽  
Evangelos Mantzaris

Background: The economically vulnerable population, mostly black, especially those who are residing in precarious informal settlements are most susceptible to the coronavirus disease 2019 (COVID-19) pandemic.Aim: To determine the impacts of the COVID-19 pandemic on the socio-economic condition of the vulnerable groups in South Africa. It also attempts to reflect the government’s response strategies to provide help and services for the vulnerable communities who are considered to be most susceptible to the existing pandemic. Lastly, the response strategies of civil society groups and the challenges they are encountering in providing humanitarian assistance to indigent communities are explored.Setting: This is a reflective study where secondary data has been analysed and intertwined with the researchers’ experiences and insights of the South African informal settlements’ welfare.Methods: This article followed a reflective approach where the experiences of the vulnerable communities are strategically reflected upon.Results: This fascinating study unearthed the effects of the coronavirus disease on the socio-economic conditions of vulnerable communities, the economy of the informal sector, the brutal enforcement agencies during the lockdown period, criminality, the fragmented government response and the marginalisation and frustration of civil society groups in providing humanitarian assistance to those in need.Conclusion: The South African government’s fragmentations, bureaucratic, maladministration and corruption in public departments have adversely impacted the welfare of the vulnerable groups who are living in the informal settlements. The human rights violations by the security agencies which are directed to the indigent people, and the centralisation of the humanitarian efforts by government had a negative effect on their wellbeing.


2019 ◽  
Vol 7 (2) ◽  
pp. 167-183
Author(s):  
Hafiz Waqas Kamran ◽  
Dr. Abdelnaser Omran ◽  
Dr. Shamsul Bahrain bin Mohamed Arshad

The aim of this present study is to investigate the impact of systematic risk and economic dynamics on liquidity reserve of banking firms in Pakistan. Data for stock return and market return is collected from Data stream, while for all other factors World Development Indicator (WDI) database is selected. The findings of Pooled Regression have suggested that Liquidity Reserves for overall banking Industry of Pakistan significantly affect by Systematic Risk and Key Economic Dynamics. Panel data Models are applied to check whether there is cross sectional heterogeneity in selected financial firms or not. The study period consists of last 15 years 2001-15, due to the availability of the data set. Moreover, other economic indicators like Lending Interest Rate and Inflation can be under observation for the future studies. As per the best perception of researchers, this is the first study in this context, addressing the Liquidity Management and selected key factors.


2016 ◽  
Vol 6 (4) ◽  
pp. 503-509 ◽  
Author(s):  
Hlako Choma ◽  
Thifulufhelwi Cedric Tshidada ◽  
Tshegofatso Kgarabjang

The purpose of this paper is to examine two South Africa legislations dealing with over indebtedness of a consumer. It is clear that in terms of the South African law, section 129 (1) and 130 (3) of the National Credit Act provide that a creditor provider who wishes to enforce a debt under a credit agreement must first issue a section 129 (1) (a) notice to the consumer (the purpose of the notice is to notify the consumer of his/her arrears). On the other hand, the South African National Credit Act encourages the consumers to fulfil the financial obligations for which they are responsible. The second legislation to be examined which serve or appear to serve same purpose as the National Credit Act is the Insolvency Act. It therefore, postulated that the compulsory sequestration of a consumer in terms of the Insolvency Act would stand as an alternative remedy for a credit provider before she/he can have recourse mechanisms, such as debt review that are focused on satisfaction of the consumer’s financial obligation , in terms of the provisions of the National Credit Act. The paper determines to what extend these measures comply with the constitutional consumer protection demands. The legislature had been pertinently cognizant of the Insolvency Act when it lately enacted the National Credit Act. This is much apparent from the express amendment of section 84 of the Insolvency Act to the extent set out in schedule 2 of the National Credit Act


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