http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.90Change: -0.02
R/$ = 12.57Change: -0.01
Au 1096.00 $/ozChange: 0.65
Pt 986.00 $/ozChange: 3.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Feb 23, 2009

SA’s financial services sector sheltered from direct impact of credit crisis

Back
Ernst & Young's Emilio Pera speaks on the effect the credit crisis has had on the local financial services sector Cameraperson: Danie de Beer Editing: Shane Williams
 
 
 
Africa|Environment|Resources|Africa|Services
Africa|Environment|Resources|Africa|Services
africa-company|environment|resources|africa|services
© Reuse this



The credit crunch and the regulatory response to the global crisis were the main risks that the South African financial services sector would face this year, auditing and business advisory firm Ernst & Young (E&Y) said on Monday.

“The common highest ranked risk across the financial services sector stems from the credit crunch, owing to its extraordinary and direct impact, as well as its unpredictable evolution,” said E&Y lead financial services director Emilio Pera.

The second corresponding risk factor, which occurred within three segments of the financial services sector – insurance, banking, and asset management – was the regulatory response to the current crisis, he added at a briefing in Johannesburg.

Pera said that the regulatory response to the crisis could affect the competitive environment of the industry.

“The nationalisation of a number of banks would have been hard to imagine months previously. The regulatory backlash may extend beyond banking into insurance and asset management.”

Despite the threat of the credit crunch, the impacts of the economic downturn on the South African banks have been less severe than international markets. Pera said that most local banks have performed well, and only those with a larger international exposure have felt a slightly more severe impact on their share prices.

“I suppose that that demonstrates that South Africa has been protected from the direct impact of the global credit crisis, although the indirect impact is flowing through to our economy.”

Pera said that it was unlikely that the South African financial services industry would see a regulation change within the short-term.

“What came through is that we have quite a robust regulatory environment. However, over the longer term, the international changes in regulation will obviously filter through to the local banks and to the local financial institutions.”

Other risks included a deepening recession, and managing talent, he noted.

Managing talent has always been critical in South Africa, and Pera added that South Africa had a relatively small pile of strong talent, especially at executive level.

“But because of the global economy, a lot of skills and resources are becoming available globally, and there is now less opportunity to move outside the South African market, where we have been relatively protected.”

Another issue affecting the South African banking sector, was cost cutting. This issue has not been as prominent in the global banking markets, said Pera, as the global industry was more focused on mitigating revenue collapse.

“South African banks are not under that much pressure as far as the revenue side is concerned, so we are focussing on the cost cutting [side].”

However, Pera noted that the international banking industry had learnt some lessons, which the South African industry could take to heart.

“There are many lessons to be learnt from the events unfolding in the financial industry, the vital importance of managing for liquidity, the need to institutionalise an appropriate risk culture, and the imperative never again to let good times lead to complacency.”

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Updated 1 hour 3 minutes ago Zimbabwe's tax collections were six% below target during the first half of the year while mining royalties and value added tax plunged, reflecting a struggling economy, the tax agency said on Wednesday. The southern African country's economy, where mining contributes...
Updated 1 hour 9 minutes ago Weak profit forecasts from Holcim and Lafarge weighed on the newly merged LafargeHolcim , the world's biggest cement maker, highlighting tough conditions that have sparked more consolidation across the sector. With investment on hold in much of the world due to an...
Rob Davies
Updated 1 hour 38 minutes ago Following what the Department of Trade and Industry (DTI) describes as “an extensive public consultation process”, the draft Promotion and Protection of Investment Bill – which government says will seek to promote inward investment, clarify the level of protection...
More
 
 
Recent Research Reports
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Construction 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Electricity 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
Real Economy Insight: Road and Rail 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
 
 
 
 
 
This Week's Magazine
Updated 2 hours 10 minutes ago Meyerton-based steel tank manufacturer Structa Technology is currently rolling out a water infrastructure build programme that supports local municipalities, water utilities, schools, hospitals and clinics.
Alternative funding models could be expected to begin coming to the fore in South Africa’s renewable-energy sector as the market becomes more competitive and domestic development finance institutions (DFIs) begin scaling back their direct involvement in projects....
DIMITRI MARKOULIDES An innovation champion must involve employees in innovation projects and keep them updated to enable them to support and drive innovation and create the future of the business
An innovation champion course that trains executives to manage innovation in their organisations aims to help companies grow revenue streams and tap new markets, says business change management consultancy BMGI South Africa innovation practice lead Dimitri...
Future digital workplaces will require employees to continuously learn new “literacies”, including new media, information and technical skills, to help their company thrive and spur personal growth. Information technology (IT) research firm Gartner, thus, suggests...
Only 25% of large construction projects surveyed in KPMG’s Global Construction Project Owner’s Survey, released in June, were concluded on time and within budget over the last three years. “Every project owner wants predictability when it comes to large projects, and...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96