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Lafferty explains secrets of S’African banks’ success

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Lafferty explains secrets of S’African banks’ success

South African banks are very different from banks in many other countries, Lafferty group CEO Michael Lafferty, has said.
In an interview with the online news medium, “Fin24” he stated that one of the key factors setting South African banks apart from, for instance banks in Europe – where states have had to bail out banks – is that local banks in the former won’t be turning to government for help.
Lafferty, who was commenting on the Lafferty Group’s 2017 Global Bank Quality Benchmarking study, in which South Africa’s banks achieved the highest rankings for the second successive year, stated: “Quite simply, the study finds that South Africa’s major banks have the highest quality among 100 banks across 32 countries that we have rated.”
He said this reflects well on the management teams running the South African banks. “They are truly world class.”
In the recently published study, Capitec Bank is the only bank in the world to achieve five stars – beating other global leaders such as HSBC, Goldman Sachs and JPMorgan Chase and local contenders Standard Bank, Absa, Nedbank and FirstRand.
The ratings in the benchmarking study provide an independent global measure of bank quality.
Like banks across the world, Lafferty said South African banks are becoming more and more focused on retail banking.
“They are gradually switching the balance of their business towards the personal sector and away from corporate customers.”
In Lafferty’s view, South Africa also has room for a lot more banks. “By US standards it could support as many as 1000 retail banks,” he reckoned.
South Africa’s five largest banks were recently downgraded in line with the country’s sovereign credit rating downgrade.
The downgrades emphasise the ongoing policy confusion and weak leadership in the country, said Banking Association of South Africa (BASA) at the time.

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