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AfricaAugust 1 2004

A picture of health

South African banking is on the right path for achieving its economic efficiency and consumer protection targets. South Africa’s banking sector is in good health, with banks well-capitalised and the total balance sheet growing markedly during 2003, according to a report released in July by the bank supervision department of the South African Reserve Bank.
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During 2003, South African banks remained well capitalised. Although the average risk-weighted capital-adequacy ratio for the sector decreased marginally to 12.2% at the end of 2003, compared with 12.6% in 2002, it remained above the statutory required level of 10%. The average aggregate capital and reserves held by the banking sector in 2003 amounted to R104bn ($16.9bn), up 5.8% from the year before.

Growth in the total balance sheet increased sharply during 2003. Banks’ total funds rose by 25.2% to R1377.6bn. At the end of the year, the four biggest banks – Absa, FirstRand, Nedbank and Standard Bank – held about 81% of the sector’s assets. Foreign bank participation increased from 6.9% in 2002 to 8.7% of total sector assets at the end of 2003.

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