In Defense of SA Banks

November 30 - While there is no shortage of criticism directed at the South African banking system, the head of Standard Bank has hit back in an unprecedented defence of the country's financial institutions.

Sim Tshabalala, who serves as the deputy Chief Executive Officer of the Standard Bank Group, said that much of the criticism was unwarranted and without basis.

When compared to banks in the United Kingdom, for example, South African banks actually perform better overall, according to Tshabalala.

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

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

Another area defended by Tshabalala is the gap between the prime lending and repo rates.

The prime lending rate is 10.5%, while the South African Reserve Bank recently set the repo rate at 7%.

This gap has caused anger among home owners struggling to pay back their loans each month.

Tshabalala said that his bank has restructured home loans worth R25 billion for homeowners who have not managed to keep up with their monthly payments, and that the average borrower at Standard Bank is already paying 80 basis points below prime.

Technology was another area tackled by Tshabalala who said that the quality used by South African banks was among the highest in the world.

"SA has one of the most advanced and inter operable ATM systems in the world," he said.

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11/30/2009 11:29:12 AM