Penny Morgan

"Bare-bones" banking has arrived —but it costs. The Mzansi project, involving South Africa’s Big Four banks, was launched this week with the aim of bringing South Africa’s low-income households in from the financial cold. But inspection of the bank charges suggests they may price poor clients out of the market.

JSE Securities Exchange-listed Liberty Life has been on the operational high road for the past year — and it shows in its interim results to end-June. Headline earnings are up by 29,4% to R460,4-million, and headline earnings per share increased to 167,2c from 130c. Operating profit from life insurance business is up 32,6% to R335-million — but it’s not all good news.

Kumba Resources, a major resources firm majority-owned by Anglo American, has interviewed 130 potential partners in its quest to meet the black economic empowerment (BEE) requirements of the Mining Charter. Presenting Kumba’s interim results this week, CEO Con Fauconnier said he hoped to go public about the company’s empowerment direction by the end of the year.

Vehicle sales are a major economic index — but they also serve as a useful demographic indicator. This week vehicle finance bank Wesbank released figures showing that over the past 10 years the value of vehicle loans to black clients increased tenfold, from R736-million in 1994 to R7,6-billion in 2004. This increase occurred against the backdrop of a 490% increase in the bank’s total book.

South Africa’s banks are using their formidable joint product development capacity to create a national savings account designed to service millions of people who have no banking services. The scheme is scheduled to be launched late this year. It is aimed at up to seven million South Africans who don’t have bank accounts.

New legislation aimed at bringing financial services within the reach of South Africa’s estimated 17-million "unbanked" adult citizens is in the pipeline. The Dedicated Banks Bill is currently being fast-tracked by the government and could be on the statute books as early as next year.

It is high noon for the Financial Advisory and Intermediary Services Act. By late next month, the financial sector faces its first watershed in the implementation of the Act. At the end of the implementation process, the Act’s requirements will result in better qualified financial advisers, to the benefit of consumers.

The Financial Sector Charter is a start — and it is a positive start. Not only will adherence to the charter transform the huge institutions within the sector, but its implementation will also boost the outlook for sustainable and higher economic growth. The charter has been well received.

Sky-high insurance premiums are unlikely to come down in a hurry, industry leaders suggested last week. An insurance analyst expects an 18-month wait before any discernible change in premiums, while FSB deputy CEO André Swanepoel reckons current market conditions will continue for another year or so.

In a turbulent week for the banking sector, FirstRand came in with enviable results for its year to June 2003, troubled Nedcor announced the departure of CE Richard Laubscher and the shares of South Africa’s three top banks moved sharply in reaction last week.