Fin24

Gordhan lashes out at banks

2012-07-04 12:42

Johannesburg - Finance Minister Pravin Gordhan accused banks and financial institutions of seeking to maximise profits at all costs, The Star reported on Wednesday.

Addressing a two-day conference on financial literacy in Pietermaritzburg, Gordhan urged South Africans to strive towards financial literacy so they could see when they were being hoodwinked by banks into unsustainable financial deals and products.

Banks played a role in the 2008 financial meltdown by offering mortgage loans to people who could not afford to repay them. South Africa lost millions of jobs and R60bn. The country ias still trying to recover from the crisis.

He accused Barclays Bank in London of manipulating interest rates, "so that they could make more money for themselves and for the bank".

"The Barclays saga of the last few days illustrates brilliantly the fault lines in the banking sector," Gordhan said.

"It illustrates dishonesty, manipulation of prices and information, profiteering at any cost, and little regard to the ordinary people and the cost to them. People think they can play games and be the only ones who benefit."

Barclays, Britain' third-largest bank, has been shaken by a scandal over traders manipulating the London Interbank Offered Rate (Libor), which is used worldwide as a benchmark for prices on about $350 trillion of financial products. 

Barclays, the parent company of Absa Group [JSE:ASA], on Tuesday announced that its chief operating officer Jerry del Missier had also quit following the resignation of CEO Bob Diamond earlier in the day and the departure of chairperson Marcus Agius on Monday.

Barclays was fined $453m by US and British authorities, becoming the first bank to settle in an investigation that is looking at more than a dozen others including Citigroup, UBS and RBS.

 

Comments
  • cliff.slabbert - 2012-07-04 12:51

    It's high time our greed mongering banks are investigated,this is only the tip of the iceberg! Watch this space as the avaricious banking house of cards come tumbling down.

      fussed.anderson - 2012-07-04 13:10

      And the gov "HOODWINKING us all the time" as well as you

      susanna.smit.7 - 2012-07-05 10:44

      Over 300 000 people (most with families) lost their homes by the end of 2010, because they couldn't come up with the monthly bond payments. Most of these were 20 year loans. Instead of extending these to 30-year loan periods, so people could afford a smaller loan amount every month, they took the houses and forced the people to move out. This resulted in neglected properties, which now had to be guarded to prevent squatters from moving in. These properties were sold or auctioned at prices the bank needed just to cover the outstanding loan amounts, not at their real value. Property agencies made some commission by selling these properties on behalf of the banks and some banks even started their own property agencies!

      Freddie - 2012-07-09 14:30

      If you read the article he is refering to overseas banks all the time. The crises in 2008 was due to the credit bubble in the US and Europe. As a result it affected our economy. Sensationlist reporting taking the ministers statement out of context. SA has the one of if not the best financial market in the world and we should be proud of it. Yes the banking industry in SA have a different business model in that they generate between 20 -25% in fee generated income. Would you rather they took extra risks with your money to attain the returns shareholders are asking as was the case in the States and Europe?? Gambling with your pension doesn't seem like the prudent thing to do.

  • francois.smith.7 - 2012-07-04 12:53

    Can the ministah also accuse the British for the offensive that liberated France? Is Britain part of SA? Ministah Gordhan, why do you not accuse SADTU for failing to teach properly. 80% of learners does not know how to calculated compound interest disregarding it being in the curriculum, I wonder how many teachers can? Why do you not have a public go at Zim that is also costing our country billions? Your are fastly becoming a hypocrite.

      koos.vanzyl.98 - 2012-07-04 12:59

      Are you condoning the purchase of a JET? Then resign

      Deon - 2012-07-04 13:26

      I agree, Maths and Science education are worse than during apartheid.

      nmateke - 2012-07-04 14:46

      @deon.louw.7505 -I agree, Maths and Science education are worse than during apartheid.... That is a complete lie

      lindela.e.mtshali - 2012-07-04 15:02

      Our education is bad indeed. You can not spell minister. Your grammar leaves a lot to be desired. Zimbabwe is not our tenth province.

  • seymore.butt - 2012-07-04 12:58

    banks should be nationalized!

  • trevor.myburgh.12 - 2012-07-04 12:58

    The banks are thieves, Why can Capitec Bank charge only one Rand a withdrawal. I go into a over draft of one thousand rand for one week, and they hit me with 14%p/a interest. When I have a credit of 25K in my account for two months they give R0,50 interest, what a joke, where as Capitec gives interest of 5%p/a no problem

  • charl.louw.3 - 2012-07-04 13:02

    I struggle to see the difference between them and the SA Government. Both entities only act in their own self-nterest. On the one side it is huge bonuses and on the other a seat on the gravy train.

  • alan.rogers.925 - 2012-07-04 13:14

    I have edited Pravin's quote a bit and I'm afraid the same can be said of your ANC cadres comrade... "It illustrates dishonesty, profiteering at any cost, and little regard to the ordinary people and the cost to them."

  • ruandacoe - 2012-07-04 13:14

    While lashing out at banks, but not doing anything about it? Does he really think his predecessor's wife deserves her exorbitant salary? Why doesn't he look at his own house and clear up messes like in Klerksdorp where his officials threaten andintimidate old people because of their incompetence and racism? Why doesn't he act against his colleagues and have the ministerial handbook overhauled? Why doesn't he stay in cheaper hotels overseas? Why doesn't he be stricter with the treasury's money?

  • fussed.anderson - 2012-07-04 13:17

    It illustrates dishonesty, manipulation of prices and information, profiteering at any cost, and little regard to the ordinary people and the cost to them. People think they can play games and be the only ones who benefit." YOUR WORDS Gordhan, sound familiar, something like the etolls dont you think

  • Billy - 2012-07-04 13:21

    as i understand it one of the reasons our banks were not hit as hard with the global recession is because of higher charges compared to everything for free at the other banks internationaly. is that true, or just a casual rumour. dont like high bank charges but if it helps us in the long run.. one thing i dont understand is, since we have all the extra charges, why do we not see it returned in service? by the sound of the loud marketing campaign of fnb, it sounds like they are the only ones getting up to speed with "up-to-date/modernday" services available to their clients. no im not a fnb rep, dont even have an account with them.

      piet.strydom - 2012-07-04 16:35

      International banks just charge their fees in different places, a returned check in the US will cost you nearly R300. And when they charge that fee, it causes a chain reaction of other items also causing overdraft fees. Their are two basic reasons for the financial mess - the banks do not have enough capital, and they lent to people that did not have enough capital. If your capital base is small, whether you are a business or an individual, even a small problem can set you on a financial death spiral. People look to banks for expert financial advise, but instead the banks just try and maximise their profit. Regardless of what it costs the customer. And obviously, the most profitable customer is a delinquent customer.... So banks have all the incentive in the world to get their customers into trouble.

      zs5zk - 2012-07-04 20:06

      Do not worry about FNB,you must see how ABSA BANK is retrenching there Staff. Unbelieving!!!!!!!!

  • rodney.overes - 2012-07-04 13:21

    My Dad Told me Years ago that the banks do not build those nice building and offices to help use. so I use banks to the minimum.

  • richard.compere.7 - 2012-07-04 13:26

    Yeah, well I hope he nails them. Banks rip us off from A to Zee and its just ridiculous.

  • badballie - 2012-07-04 13:43

    Very quick to point fingers when not only every single bank by the Reserve bank as well is currently being sued by the New right Alliance because of years of underhand dealing by banks in general, all done with the knowledge of government hey? Your cry's of unity are glaring lies and you know it well

  • thabo.shaku - 2012-07-04 15:43

    Nou praat jy Pravin!

  • Stephen - 2012-07-04 16:33

    All the banks are thieving scum suckers. You pay more and more charges for lesser and lesser service, they never attend to complaints,hire managerial incompetents and always make out that they are doing good while they screw you over...........bottom line.

  • Vince.York - 2012-07-04 17:51

    Sharia banking JUST MIGHT be the stiletto in SA's financial economic world! Watch this space for the next thrilling episode as two opposites compete for supremacy.

  • nkululeko.j.duma - 2012-07-04 18:51

    People's comment are so funny here.Always out of the main point. My advice to you is.. "how about you guys move to Europe now and see whether you will live a comfortable life"... You will stay there for couple of years and come back. This is what will happen to you in Europe: 1.you will lose your jobs after a couple of months you there, you won't afford to go out, you will starve to death as you wont have enough money to feed yourself and you will live with at least 6 people in one flat. What you really need to do is to ask what is it that we do for our country and what we can do to have a better government. we must stop pretending as if Europeans countries are like heaven on earth while they are not. "stop complaining and come up with solutions folks"

      piet.strydom - 2012-07-04 22:45

      Nkululekho - The first step in the solution is to get rid of the ANC government. Then the new government can fix the hospitals, the schools, the roads, the electricity and all the other parastatals and bankrupt municipalities. While the new government is doing that, private business can get on with creating jobs and wealth. School children and students should go to school, and pass their subjects. In the mean-time, I am living in America, and send money back every month. I have a good job here, because I studied when I was at school, I didn't toyi-toyi, and my leaders didn't run around with nonsense like "no education before liberation". They understood that education is liberation. Apart from living in the USA, I am also regularly in Europe. And it is, even taking into account all the problems, very good places to stay. The government, while a little corrupt, doesn't blatantly steal the treasury dry. I can walk on the streets any time of the day or night without fear, my kids can go to good schools, the neighbourhoods are clean, etc etc. One of the biggest concern here, is that education is ONLY 21st best in the world. I suggest you get of your high horse, and work with the people that are willing to work with you, iso alienating the few that are still left.

  • machaven - 2012-07-05 12:24

    Makes sense, ABSA are thieves too.

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