Johannesburg - The head of Standard Bank has pulled no punches in dismissing criticism levelled at South African banks.

Head of Standard Bank South Africa Sim Tshabalala, who is also deputy CEO of the Standard Bank group, said on Thursday SA banking is in many instances cheaper than what consumers are presented with abroad, including developed economies like the UK.

"I am not being tentative here - the perception that South African bank charges are far more expensive than their international counterparts is false," Tshabalala said.

"They say, for example, that in the UK your banking is free when you transact with ATMs; the reality is that UK banks sit on the float for six days while in South Africa they pay you out straight away."

He also challenged consumers to compare penalty fees charged by UK banks, as opposed to their South African counterparts.

Two other issues Tshabalala emphasised was the quality of the technology attached to the ATM system in South Africa and the high cost of moving cash around.

"SA has one of the most advanced and inter-operable ATM systems in the world," he said, adding that in comparison many foreign banking consumers would have to seek out an ATM directly linked to their banks.

Repo and prime

Tshabalala also said criticism about the gap between the repo and prime lending rate is without basis.

The repo rate is the rate at which banks lend money from the South African Reserve Bank. It is 7% at the moment, while the prime lending rate is 10.5%.

According to Tshabalala, the average borrower in Standard Bank's homeloans portfolio is already lending money at about 80 basis points below prime.

He added that Standard Bank has over the past year also restructured R25bn in homeloans for owners who have slipped into default.

- Fin24.com