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Faculty of Management Sciences

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Subject: search.filters.subject.Banks and banking--South Africa

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Now showing 1 - 4 of 4
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    Exploratory study to develop an Islamic compliant investment and banking framework within a South African context
    (2020-10) Jeeva, Shakir; Bayat, Mohamed Saheed
    Islam, as a religion, is growing at a phenomenal rate, and with this growth, comes a greater demand for Islamic products such as Islamic banking and investment. While there have generally been Islamic offerings available in Muslim majority countries such as Malaysia, Saudi Arabia and others, these offerings are not widespread, relative to conventional financial offerings. This sporadic availability leads to a lack of offerings in other parts of the world, specifically in non-Muslim majority countries where there are growing Muslim populations, and in turn a demand for Shariahcompliant financial offerings and tools. Therefore, the researcher attempted to understand the underlying principles and parameters with which Islamic finance is permissible and can operate, specifically in investment and banking, such that a model can be derived and presented based on these parameters. Further, specific to this, the researcher sought to analyse the model within a South African context from a regulatory framework requirement, considering the current frameworks and regulations as stipulated by the government, the FSCA, the SARB, as well as the understanding, awareness, attitudes and drivers of Muslims towards current Islamic offerings within South Africa. South Africa has several Islamic offerings which are available through Islamic windows as well as fully-fledged Islamic institutions. The primary data was collected through a questionnaire and administered electronically via social media in major cities within South Africa, namely Johannesburg, Port Elizabeth, Durban and Cape Town. The study followed a crosssectional quantitative design with a sample size of N = 743. Based on the results, it was found that while the sample was generally well educated, they lacked Islamic specific knowledge. Additionally, awareness and penetration of Islamic finance products were not high, relative to the usage of conventional products. While respondents were open to making use of Islamic finance, the religious obligation was not the main and only driver, and other factors are expected to be in place by the participants such as competitive pricing, good service, and access to facilities such as branches and ATMs. The study also introduced a predictor model of consumer behaviour to measure the level of perception of the local community. The results indicated that consumer behaviour is significantly influenced by norms/attitudes and views/opinions. Recommendations were made, which totalled 18, and included increasing awareness regarding Islamic finance from providers by way of marketing through social media and education of potential customers. Also, consideration of existing alternative models which can be adapted to the Islamic principles, self-regulation and standardisation, and creating an Islamic compliant SARB facility for Islamic institutions were all discussed and commented on. Additionally, education regarding the product offerings and its benefits, as well as its relation to religious obligations, must be a key strategy not only for consumers but also for institutional staff, lawyers and regulators. Notwithstanding this, to achieve additional market penetration, other expected factors should also be in place, such as competitive pricing and service, in conjunction with education. The study was concluded with discussions, conclusions, limitations and recommendations for future research in this regard.
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    Economic role of derivatives on bank lending, firm value and economic growth : evidence of South Africa
    (2021-11) Chikwira, Collin
    The South African financial system has had substantive growth in the derivative market from 1996 up to the present day. The instruments are growing at an astonishing rate, although the economic growth of South Africa was unstainable. It is growing at a slow rate that cannot be matched to the rate of derivatives growth. However, the causal analysis of derivatives markets and economic growth in developed market economies revealed that the variables tend to move together over time. What remains thorny to researchers is the question as to why such a relationship exists. Is it a pure coincidence, wealth effect, or is the derivative market a mirror or a leading indicator of the economy, or does the derivatives market drive the economy or reverse? The present study wishes to find out the answers to such questions regarding South Africa through examine the impact of derivatives on bank lending and firm's value and consequently economic growth. This study is predominantly quantitative, and it followed financial development-growth nexus studies to establish its methodology. The adoption of the methodology followed that derivatives are regarded as part of financial development instruments among stocks, bonds, bank loans, and other financial instruments. In terms of the estimation technique, the system generalised method of moments (GMM) was deemed appropriate due to its wellacknowledged ability to account for endogeneity prone with panel data set and growth-related models. This study revealed that derivatives, irrespective of type, positively influenced lending in the banking industry. Thus, the evidence shows that loan portfolios of banks that participate in derivative instruments increase. In addition, the analysis shows that derivatives permit banks to lend more to the private sector; there is a positive statistical relationship at 1 percent significance. Listed non-financial firms on the Johannesburg Stock Exchange use derivatives to manage foreign exchange, market, price, and interest rate risks during their operations. The results obtained suggested that the use of derivatives generates value for non-financial firms. There is a significant hedging premium for South African non-financial firms that use derivatives. Derivatives permit more significant extension of credit to the private and public sectors, which impacts the economic growth of South Africa; that is, if there is a 1% change in the loan portfolio growth, the real GDP of South Africa expanded by 1.52%, as estimated by the research findings. Also, derivatives allow non-financial firms to undertake capital investments, increasing the yearly South African real GDP by 1.15% if there is a 1% change in the firm value. It is observed that economic growth pinned its roots in the efficiency of the banking sector. Banks effectively provide funding through lending to the private sector to secure credit and interest rate risks with derivatives. Thus, it is availing liquidity in an economy that is essential for the firms to capitalise, finance capital projects, and invest in opportunities to derive economic activities. Thus, economic growth increases the production of quality goods and services through the private and public sectors. The research findings documented in this study supported policies to inspire the development of derivative markets as part of financial development. This can help deepen the financial sector in South Africa, which will help stimulate economic growth. Therefore, it is recommended that policymakers adopt strategies that reinforce the development of derivative markets in the country through fiscal or monetary interventions.
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    The role of the Business Analyst in influencing the performance project synergies : a case study of Standard Bank South Africa Head Office
    (2018-09) Pillay, Anjela; Mbehle, Thokozani Patmond
    This study explores the role of synergy between Business Analysts and project teams that influence the success of project management as critical exercise for Business Analysis in the project based activities at Standard Bank. The study contemplates to contribute towards a better understanding of the wider effects of Business Analysts on the South African Economy, with regards to the extent to which collaboration approach leads to an improvement of the performance of the bank. The overall objective of this study was to explore the effects of the Business Analyst in influencing the success of a project synergy. The sub-objectives of this study, firstly, to examine the dynamics of business analytical value-creation system towards project management success at Standard Bank Headquarters; secondly, to analyse how the interrelationship between the Business Analysts and the project management teams creates potential project success for delivery of business value; thirdly, to explore challenges on the degree of training and communication networks faced by Business Analysts in enhancing the integrated project performance; and finally, to establish the extent to which the Business Analysts can influence the success of a project. A descriptive research study was used together with a quantitative approach to research analysis. A census was conducted using purposive sampling within the population of the business unit. A list of about 80 names was chosen out of the Personal and Business Banking Information Technology address book to complete the survey questionnaire and 65 of the respondents was achieved. Frequency distribution of data was utilised for analysis purpose. The study discovered that Business Analysts require professional development to reduce impediments and improve project results. Both Business Analysts and Project Managers need to become more involved at the enterprise level because without an enterprise analysis perspective, they lack the connection between what they are doing and why they are doing it. They understand how to increase the company’s potential benefits, understand business needs and ensure that the priorities of the business are focused on value.
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    Influence of intellectual capital on organisational performance in one of the Big Four Banks in South Africa
    (2017-11) Venkatsamy, Daneshree; Chili, Nsizwazikhona Simon
    The purpose of this study is to investigate the critical components of Intellectual Capital (IC), such as customer, human and structural capital; and how to best integrate these elements to maximise optimisation of IC. This research seeks to understand how an organisation can capitalise on IC as a decision-making mechanism; and what strategies an organisation can employ to leverage IC as a value generating attribute towards organisational performance. Furthermore, this study aims to identify how a large part of decision making is derived from an organisation’s internal intellectual capital, and its critical components. The research is descriptive in nature, as it identifies the critical components. The findings provide an insight into the influence of intellectual capital on a bank’s performance. The research employed a quantitative methodology via the use of a questionnaire. A non-probability purposive sampling strategy based on an individual’s knowledge of intellectual capital activities that take place within the bank was employed to ensure data collected was reflective of the target population identified, more specifically, employees who are permanent at one of the big four banks in Johannesburg, and who are directly affected by influencing factors of intellectual capital. After determining that the questionnaire was reliable and valid as well as the sample size being sufficient, descriptive statistics in the form of frequencies and percentages were used to describe the data and compile the findings. Based on the results of the questionnaire, it was found that organic growth had the highest impact, and being first to market within new target had the lowest impact with regards to processes that measure and maximise the yield from IC. In addition, it was found that keeping customers informed of changes had the highest commitment, and having budget readily available for IC initiatives had the lowest level of commitment within the organisation. Finally, it was found that being innovative, customer-centric, sustainable and aware of market threats were all key factors that influenced the management and enhancement of intellectual capital within the organisation. The implications of this research for theory and practice are that; productivity and profitability measures are the most effective processes to maximise the yield from IC within this organisation. On the one hand, the commitment to IC within the organisation is reflected by respondents feeling that the organisation is highly committed to human capital processes involving customer communication, especially when they involve major changes. However, on the other hand, when it comes to investing in human capital processes, it was felt by respondents that budgets were not readily available to pursue any IC initiatives. This level of commitment is enhanced and managed through the perspective of all four key factors identified, with no one single factor identified to be the most important or least important; but all four factors being of equally high importance.