South Africa will give consideration to reviewing its policy on the ownership by foreign interests of South Africa’s banks, says Minister of Finance Trevor Manuel.
In a written reply to a question in Parliament, he said the current policy is a four-pillar model.
“This policy is informed by the view that four major banks is the minimum number necessary to ensure a certain level of competition in the market.
“This policy was formulated in response to the proposed merger of Nedcor and Stanbic in 2000, at a time when all the major banks were locally owned. As such, the four-pillar model referred to a minimum of four domestic banks,” he said.
Manuel’s comments come amid negotiations by Barclays in the United Kingdom to gain a majority stake in Absa.
While the four-pillar policy remains, he said the government “will give consideration reviewing its policy on the ownership of the four pillars in the light of changing circumstances”.
He said he will — as finance minister — “take into account all the costs and benefits of foreign ownership in arriving at a policy position. Such a policy position will be guided by what is in the best interest of South Africa.
“This includes ensuring a continued commitment to transformation and improved access to affordable financial services for low-income people. Compliance with the empowerment and access targets of the Financial Sector Charter would be a minimum requirement in this regard,” said Manuel. — I-Net Bridge