Clamour for state bank to take on ‘big four’

THE ANC is forging ahead with plans to create a state bank in addition to Postbank which is being transformed into a retail bank.

This is part of the party’s strategy to transform the financial sector by breaking up the dominance of the four major banks.

Last week the Sunday Times reported that at least three provinces — Limpopo, KwaZulu-Natal and North West — were considering moving billions of rands in government funds from commercial banks to stateowned and black-controlled institutions.

The ANC’s head of policy development, Jeff Radebe, said the financial services sector would receive special attention in the party’s policy discussion document on economic transformation, to be released for public comment today.

Radebe, who is also the minister responsible for performance monitoring and evaluation in the Presidency, said the government wanted the process of transforming Postbank into a retail bank to be fast-tracked.

Radebe said the ANC was also still determined to see a state-owned bank and other co-operatives entering the banking space.

The industry employs close to a 160 000 people and manages assets worth more than R3.9-trillion, according to the Banking Association South Africa. The sector is dominated by four retail banks: Absa, First National Bank, Nedbank and Standard Bank.

Smaller players such as Capitec are making inroads, but Radebe said this was not enough to crack the “monopolistic tendencies” of the big four, hence the party’s intention to push for a state-owned bank and the full corporatisation of Postbank.

“We should see a vibrant competitive business in our country to promote inclusive growth, to promote job creation,” said Radebe.

“The issue of the financial sector is very prominent in the document because of the issue of a few banks still dominating in the financial services sector. There has to be action there.

“The issues of concentration and monopolistic tendencies in the economy have to be dealt with.

“It’s important, because if your economy is concentrated in a few hands, it stifles the growth of the small and medium business sector and our goal as the governing party is to promote small and medium enterprises.”

Radebe said the party wanted the Competition Commission to play its part in helping the government to open up competition in the financial sector.

The Competition Commission was recently lauded for exposing a scandal in which South African banks were involved in colluding on rand-dollar exchange rates.

“Competition authorities in South Africa, they need to do their job in order to deal with this issue.

“I think experience has shown that where competition authorities act, like they have done on the collusion of construction cartels in our country, you can get better results.”

He said the ANC would still prioritise the transformation of the mining sector by changing ownership structures to reflect the demographics of areas in which mining takes place.

The issues of monopolistic tendencies in the economy have to be dealt with