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Johannesburg - South African banks were adequately capitalised by the end of last year, at 15.6 percent, according to the SA Reserve Bank's (Sarb) bank supervision department's annual report for 2013 released on Wednesday.
"Total banking-sector assets amounted to R3 843bn at the end of December 2013 (December 2012: R3 767bn), representing a moderate year-on-year increase of 5.2%," it said in the report.
"The four largest banks in South Africa contributed 83.4% to the balance-sheet size of the total banking sector, similar to the level recorded in 2012."
Gross loans and advances, which on average represented 76.6% of banking-sector assets during 2013, increased by almost 8% to R2.97 trillion at the end of December 2013.
This was mainly due to increases in foreign currency-denominated loans, specialised lending, and lease and installment debtors.
Home loans and term loans, accounting for 28.5% and 18.2% respectively of gross loans and advances, remained the single largest components of gross loans and advances at the end of December 2013.
"Other loans, leasing and installment debtors, and commercial mortgages represented 17.7%, 11.2%, and 8.8% respectively of gross loans and advances," according to the report.
"The composition of banking-sector liabilities, which comprised predominantly deposits... remained largely unchanged when compared to 2012."
Deposits on average represented 87.6% of liabilities during 2013, marginally higher from the 2012 average of 85.5%.
In December 2013, banking-sector deposits comprised fixed and notice deposits (29.7%), current accounts (20.4 percent), call deposits (17.2%), other deposits (12.4%), and negotiable certificates of deposit (12%).
"Corporate and retail customers were the main source of banking-sector deposits throughout 2013, and on average accounted for 45.2% and 22.6% respectively of total deposits.
"On average deposits from banks represented 9.8% of banking-sector deposits in 2013."
Other sources of deposits included deposits from securities firms (averaging 7.3%), the public sector and local authorities (averaging 6.8%), and sovereigns (averaging five percent) during 2013.
Off-balance-sheet items expressed as a percentage of total assets increased marginally from 28.8% in January 2013 to 29.2% in December 2013, mainly due to a 26.3% year-on-year increase in guarantees issued on behalf of clients.
"Banks remained profitable during 2013. However, the banking sector’s 12-month cumulative gross operating profit decreased year-on-year by 1.9% as at 31 December 2013," the department said in its report.
This was mainly due to a decline in dividend income received from subsidiary companies. Total banking-sector return on equity was 14.7%, and the return on assets was approximately 1.1% as of December 21, 2013.
Staff expenses remained the single largest cost component and accounted for 55.8% of the banking sector’s total operating expenses during 2013.
Looking at the shareholding structure of the South African banking sector, as of December 2013, 48% was held by foreign shareholders, 28% by minority shareholders, and 24% by domestic shareholders.
In 2012, 43% was owned by foreign shareholders, 30% by minority shareholders, and 27% by domestic shareholders.
