Pretoria - The Reserve Bank wants the country’s lenders to
hold more capital than the minimum required by international standards as part
of a global drive to bolster confidence in the industry and prevent a repeat of
the 2007-9 financial crisis.
South Africa’s Reserve Bank said on Monday it wanted lenders
to hold at least 6.5% of common equity Tier 1 capital and 10% of total capital
by 2015. Those figures are both 200 basis points above the minimum requirements
set by a global agreement meant to force banks to hold more capital.
Analysts say banks in Africa’s leading economy are already
well capitalised and are unlikely to require systemic support, but will struggle
to meet liquidity ratios.
Registrar of banks Rene Van Wyk said he would be discussing
with the international Basel committee later this month whether high-grade
corporate bonds by companies with higher ratings than the sovereign rating can
qualify as liquid assets.
They currently do not qualify according to the Reserve
Bank’s interpretation of the so-called Basel III rules, he said.
“We will discuss it with the Basel committee. I think our
interpretation is wrong,” Van Wyk said.
Corporate debt issued by foreign companies and covered bonds
- low yielding securities issued by banks and backed by a pool of loans - will
not be included in the liquidity coverage ratio, he reiterated.
The Reserve Bank has approved a facility to help lenders to
meet tougher liquidity requirements under the new regulations after a series of
quantitative impact studies of seven lenders revealed shortfalls by some.
Under stress conditions, the lenders would have a gap of
R240bn to cover liquidity requirements over 30 days, the regulator said.
The new global rules that are still under discussion are the
cornerstone of efforts by international regulators to make sure the global
banking system is more resilient.
The rules, which are to be phased in between 2013 and 2019,
will require banks to maintain top-quality capital equivalent to 7% of their
risk-bearing assets.
South Africa will require its banks to hold 8% of Tier 1
capital by 2015.
The Tier 1 ratio already stood at 12.2% last year from 11.8%
the previous year, the Reserve Bank said in its annual banking supervision
report.
South Africa is dominated by four large lenders: Standard
Bank Group [JSE:SBK], FirstRand [JSE:FSR], Absa Group [JSE:ASA] and Nedbank
Group [JSE:NED].
Total liquid assets rose to R283bn at the end of 2011 from
R234bn the previous year, the report said.
Impaired advances, or bad loans, averaged 4.7% of banks’
total loans in 2011, an improvement from 5.8% previously. Assets increased 9%
to R3.4bn.
