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We take a look at the latest banking sector information published by the South African Reserve Bank and find that gross loans and advances issued by banks have grown only slightly over the last year. Is this a sign that banks are worried about consumers being able to pay back their debt?
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So how many banks are there in South Africa?
Based on the data from the South African Reserve Bank (SARB) we can say the following about banks in South Africa:
Registered Banks: 19
Mutual Banks: 3
Co-operative Banks: 3
Local branches of foreign Banks: 15
Foreign Banks with approved local representative offices: 31
So what do these banks balance sheets look like and how does it compare to a year ago?
Registered Banks: 19
Mutual Banks: 3
Co-operative Banks: 3
Local branches of foreign Banks: 15
Foreign Banks with approved local representative offices: 31
So what do these banks balance sheets look like and how does it compare to a year ago?
Total assets of banks in South Africa amounted to R5.165 trillion in May 2018 , up from R4.933 trillion in May 2017. This equated to growth of 4.7% in Total assets for banks in South Africa. Gross loans and advances came in at R3.862 trillion in May 2018, up from R3.762 trillion in May 2018, which is growth of 2.6%. This is relatively subdued growth in the gross loans and advances and could potentially point to banks being more cautious in issue new loans and advances due to fears of all of these loans and advances not being paid back by the parties it issues these loans and advances to.The bar chart below shows the monthly, year on year growth in loans and advances by bank from January 2016 up to May 2018. And it sure shows how quickly the growth in loans and advances have slowed down.
The bar chart below shows that for the last 8 months the year on year growth in loans and advances has been below the average growth rate from the start of 2016, which is a clear indication that credit being issued by banks are being reigned in by the banks. And this is not necessarily a bad thing as the last thing South Africa needs is economic growth and consumer demand being fueled by credit instead of savings and actual money earned from salaries, businesses etc.
And for those wondering what is the amount of money earned on interest banks charge on their loans and advances. The amount of net iterest income earned by banks in South Africa totaled R160 billion for the 12months ending in May 2018 (that is roughly R13.3billion earned per month by South African banks on interest it charges on their loans). A very nice trough to feed from.
And for those wondering what is the amount of money earned on interest banks charge on their loans and advances. The amount of net iterest income earned by banks in South Africa totaled R160 billion for the 12months ending in May 2018 (that is roughly R13.3billion earned per month by South African banks on interest it charges on their loans). A very nice trough to feed from.