No formal move on Nedbank

Johannesburg - The Reserve Bank has so far not received a formal request from a foreign bank to take over a local bank, Errol Kruger, the Registrar of Banks, said on Wednesday.

Should such a request be received, it would be considered on the basis of the Reserve Bank’s existing policy and precepts. A recommendation would then be made to the Minister of Finance.

Old Mutual, which owns 54% of Nedbank, has previously declined to confirm or deny that talks about a possible takeover are being held – after a foreign media group reported that Goldman Sachs had already been appointed to do an investigatory audit.

Kruger stressed that South African banking assets were national assets.

At the same time Kruger noted that in such cases changing circumstances needed continually to be taken into account.

Some years ago it may have been the correct decision for Barclays to take over Absa, but circumstances may since have changed.

Kruger also expressed his satisfaction that South African banks have little exposure to European banks amid the latest widening debt crisis. According to his office’s information, only 0.2% of the almost R3 000bn that local banks have invested in foreign assets is in European banks.

Meanwhile the crisis has not left banks totally unscathed, with total banking assets now 6.6% down at R2 967bn. The four big banks – Absa, First National Bank, Nedbank and Standard Bank – own 84.6% of these assets.

There are promising signs that banks’ impairments have peaked at R134.3bn, or 5.89% of gross loans and advances.

With regard to the criticism that South African banking executives' remuneration packages are excessive, Kruger says that comprehensive information about every top manager’s total remuneration package has been supplied by the banks at his office’s request. This is regularly monitored by his office.

He says that he is satisfied that the banks are attending to these issues.
 
- Sake24.com