Analysing the influence of banking loyalty programmes on South African consumer behaviour post-Covid
- Authors: Jordaan, Ross
- Date: 2024-04
- Subjects: Banks and banking -- South Africa , Customer loyalty programs , Customer clubs , consumer behaviour
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/65075 , vital:74016
- Description: Banking institutions promote loyalty programmes that offer customers cost saving benefits. The research investigates the perceived loyalty programme benefits from a customer perspective. The research analyses the customer satisfaction and the effect the banking loyalty programmes has on customer behaviour post Covid-19. Focusing on customer retention and customer relationship management, banking institutions have adopted loyalty programmes as a strategic tool to enhance customer loyalty and satisfaction. The findings of this research provided valuable insights into the key factors that drives customer loyalty and engagement with banking loyalty programmes. This study used quantitative research methodology utilizing surveys and statistical analyses to gather and interpret data using simple random sampling from a diverse sample of banking customers from the Gqeberha area. A response rate of 50.5% was achieved in this study. The findings of this study underscore a pivotal realisation that banking loyalty programmes in isolation prove insufficient to exert a significant influence on banking customer behaviour in the post-Covid era. A contemporary approach is required to meet the evolving expectations and dynamics within the customer base. The study observed that digital transformation and strategic partnerships are a key determinant in shaping banking customer behaviour, hence the study advocates for a synergised approach, where banking loyalty programmes, digital transformation, and strategic partnerships operate in tandem. It is recommended that banks should understand the dynamics of consumer behaviour in the context of loyalty programmes, hence they can optimize their strategies to strengthen their position and relationships with their customers. Traditional silos of banking loyalty programmes must integrate and adapt to the current banking customer preferences, this holistic approach is not just a recommendation but also imperative for sustainable growth and resilience in the banking sector. The study will contribute to academic research and offer practical implications for banking executive seeking to build, design and implement effective loyalty programmes in a highly competitive banking industry. , Thesis (MBA) -- Faculty of Business and Economic Sciences, Business School, 2024
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- Date Issued: 2024-04
The impact of Basel III higher capital and liquidity requirements on the profitability of South African banks
- Authors: Mdandalaza, Zuko Ludwig
- Date: 2024-04
- Subjects: Corporations -- Finance -- South Africa , Corporate governance -- Law and legislation -- South Africa , Banks and banking -- South Africa
- Language: English
- Type: Doctorate , text
- Identifier: http://hdl.handle.net/10948/62355 , vital:72614
- Description: This study employs a robust quantitative research design meticulously tailored to investigate the nuanced impact of Basel III capital and liquidity requirements on the profitability of South African banks. The data collection process is anchored in a rigorous approach, driven by the acquisition and meticulous review of financial statements sourced from a carefully curated sample of South Africa’s banks. Ensuring the sample’s representativeness is of paramount importance for bolstering the study’s findings. To this end, a purposive sampling technique, distinguished for its deliberate selection methodology, was applied judiciously. This method yielded the selection of 10 banks, chosen carefully to encapsulate a cross-section of the South African banking landscape, so enhancing the research’s validity and robustness. The analysis of this intricate dataset is underpinned by advanced statistical techniques, with regression analysis the principal analytical tool. Specifically, the study harnesses the Arellano-Bond generalised method of moments (GMM), a sophisticated yet versatile statistical methodology appropriate for disentangling complex relationships in longitudinal data. This analytical approach is perfectly suited to trace the nuanced interactions between Basel III’s capital and liquidity requirements and the profitability trajectories of South African banks. Spanning a 12- year timeframe, 2010 to 2022, this study attempts to encapsulate the evolution of the banking landscape in the wake of Basel III’s implementation. This extensive temporal scope enables the research to capture both short-term fluctuations and long-term trends, enriching its insights and lending depth to the analysis. The first objective of this study was to unravel the intricate web of macro-specific and bank-specific factors influencing the profitability of banks in South Africa. Net interest margin (NIM), a pivotal metric reflecting bank profitability and efficiency, was central to the investigation. Empirical insights gleaned from the analysis revealed several key determinants of NIM for South African banks. Notably, NIM displayed a high degree of persistence over time. This suggests that South African banks do not adjust swiftly to changes in market conditions, emphasising the importance for bank managers of considering the long-term repercussions of their decisions on interest, income and expenses. The results also illuminated a set of critical variables closely linked to NIM. These include credit loss, non-interest income, market concentration, stability (Z-score) and inflation. These variables collectively underscored the banks’ ability to navigate the multi-faceted landscape of risks and uncertainties in the banking sector, including credit risk, operational risk, market risk and inflationrisk. The positive relationship between these variables and NIM indicated the banks’ adeptness at passing on costs and risks to customers through higher interest rates or fees, all while leveraging their market power and diversification strategies. Conversely, a negative and significant association emerged between NIM and bank size, GDP per capita, private credit and the repo rate. These variables underscored the competitive pressure and macroeconomic dynamics influencing the demand for and supply of credit in the banking sector. In this context, the negative relationship suggested that larger banks, those operating in more developed and competitive markets, and those encountering lower policy rates, tend to exhibit lower NIM. These banks, due to heightened competition and lower demand for credit, face diminished interest income and narrower margins. Notably, variables like cost-to-income ratio, funding structure and loan-to-deposit ratio did not emerge as significant in explaining NIM for South African banks. This implies that these variables exert a relatively weaker influence on the profitability and efficiency of South African banks, or that their effects are subsumed by other variables in the model. The second objective examined the effect of higher capital buffers on bank profitability. Empirical findings revealed a negative yet statistically insignificant co-efficient for the CET1 variable in the regression analysis. This observation indicated that there is no substantial relationship between Basel III Tier 1 capital ratio (CET1) and bank profitability, as measured by NIM, among South African banks. This suggests that Basel III capital requirements do not have a significant influence on the profitability and efficiency of these banks, or their effect varies depending on other bank-specific or macroeconomic variables. The third objective focused on the effect of Basel III liquidity regulations, epitomised by the liquidity coverage ratio (LCR), on bank profitability in South Africa. Empirical results revealed a negative but statistically insignificant relationship between LCR and NIM. This observation indicates that Basel III liquidity regulations exert no discernible effect on the net interest income of South African banks. This finding could be attributed to the fact that South African banks had already fortified their liquidity positions prior to Basel III implementation, adhering to stringent regulatory requirements and prudent liquidity management practices. As a result, the introduction of LCR did not pose a significant alteration or constraint on the liquidity standing and profitability of South African banks. It also implies that other factors, like market conditions, funding structures or asset compositions, play more pivotal roles than the LCR in shaping the profitability of South African banks. These factors may influence the net interest spread, cost of funds or risk-adjusted returns of these banks. , Thesis (PhD) -- Faculty of Economics and Management Sciences, School of Economics, 2024
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- Date Issued: 2024-04
Financial deepening and economic performance in South African commercial banks
- Authors: Mpongoshe, Nomthandazo
- Date: 2023-12
- Subjects: Economic development , Banks and banking -- South Africa , Performance -- Measurement , Liquidity (Economics)
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/65829 , vital:74271
- Description: Financial deepening and economic growth have received much attention in the literature. However, there remains a significant gap in understanding the relationship between financial deepening, and bank performance especially within the context of South African commercial banks. This research aims to investigate the empirical relationship between financial deepening and the performance of all South African commercial banks from 1987 to 2019. The research adopts a descriptive research design and utilizes secondary data along with time series analysis techniques. The research empirically investigates the relationship between financial deepening and bank performance, using financial deepening indicators such as Market Capitalisation (MC), Credit to the private sector (CR), Money Stock (MS), and Bank liquidity (BL). Control variables such as Gross Domestic Product (GDP), Inflation rate (IF), and Lending interest rate (LR) are also considered. The autoregressive distributed lag bounds testing (ARDL) method is employed to test the relationship between financial deepening and bank performance. The autoregressive distributed lag bounds testing (ARDL) method is employed to test the relationship between financial deepening and bank performance of South African commercial banks. The findings indicate that financial deepening has both short-term and long-term impacts on bank performance. Each component of the financial deepening indicators demonstrates a strong and statistically significant relationship with bank performance. This empirical evidence suggests that financial deepening has made a positive contribution to the profitability of South African commercial banks. Furthermore, the analysis reveals a long-run equilibrium relationship between financial deepening and the economic performance of the South African banking sector. This research addresses the gap between theoretical beliefs and empirical evidence by establishing a robust and positive contribution of financial deepening to the profitability of South African commercial banks. The findings highlight the significance of financial deepening in enhancing bank performance in South Africa. , Thesis (MCom) -- Faculty of Business and Economic Sciences, School of Economics, Development and Tourism, 2023
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- Date Issued: 2023-12
Factors influencing consumers’ adoption of chatbot assisted marketing activities in the South African banking industry
- Authors: Rusike, Christabel
- Date: 2023-04
- Subjects: Banks and banking -- South Africa , Consumer movements
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/62380 , vital:72643
- Description: In a world where technology is evolving at an alarming rate there have been so many advancements and developments in the marketing field and how consumers engage in accessing products and services. In general, a great body of literature on information technology shows evidence that areas such as mobile banking and organisational technology adoption have been explored. However, limited attention has been dedicated to consumer adoption or acceptance stages of technology, particularly chatbots in the South African context. Apart from that, during the peak of the Covid 19 pandemic, consumers had to adjust to mainly doing transactions online as there was a restriction in accessing banking halls. Given this backdrop, the aim of this study is to address this particular research gap through investigating factors influencing consumers’ adoption of chatbot assisted marketing activities in the South African banking industry. The research was inspired and constructed upon three research theories, namely Technology Acceptance Model (TAM), The Diffusion of Innovation Theory (DoIT) and Unified Theory of Acceptance and Use of Technology 2 (UTAUT2). Based on these theories, a hypothesised model was formulated with eight independent variables, namely Perceived Usefulness, Perceived Ease of Use, Facilitating Conditions, Price Value, Hedonic Motivation, Social Influence, Perceived Compatibility and Relative Advantage. The dependent variable was put forward as Chatbot Adoption. Descriptive and explanatory research designs were selected for this study, utilising a quantitative research methodology. In addressing the objectives of the study, secondary data was collected through the internet, magazines, newspapers, articles, journals and books to aid in completing the literature chapters and construction of the measuring instrument. Primary data was also collected through a self-administered questionnaire which was created on QuestionPro and the link was distributed to the respondents. The population under study were consumers of the banking industry products and services in South Africa. The target respondents consisted of consumers who hold valid bank account and have used or experienced online activities within the banking sector. A non-probability vii sampling method through convenience and snowball sampling was adopted to recruit the respondents. Data were obtained from 151 usable survey questionnaires. The data collected from the respondents was coded and captured on a Microsoft excel spreadsheet which was then followed by analysing of data using IBM SPSS version 16. From the analysed results, all the suggested independent variables were retained as the respondents confirm in varying degrees the influence on behaviour that the factors have. The study found that the eight independent factors have practical and statistically significant correlation with consumer adoption of chatbot assisted marketing activities within the South African banking industry. In addition, the inferential ranking of the factors indicates that Relative Advantage, Perceived Usefulness and Price Value fall under one group of significant factors perceived by consumers in their decision to adopt chatbot assisted marketing activities. It can therefore be concluded that it is useful for the banking industry to implement the identified factors and recommendations offered to enhance the use of chatbots in consumers’ online banking activities as the responses obtained are in general favourable. The study thus contributes theoretically and practically to the body of knowledge particularly digital marketing through chatbots in the banking sector. Therefore, the findings can be useful for financial marketing, digital banking and the suggested model can help the marketing and artificial intelligence departments in the banking industry in the decision-making process. , Thesis (Ma) -- Faculty of Faculty of Business and Economic Sciences, 2023
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- Date Issued: 2023-04
The nature of competition in the banking sector and its effect on financial inclusion in South Africa
- Authors: Ngonyama, Nomasomi https://orcid.org/0000-0002-7536-9297
- Date: 2023
- Subjects: Banks and banking -- South Africa , Competition -- South Africa , Financial services industry
- Language: English
- Type: Doctoral theses , text
- Identifier: http://hdl.handle.net/10353/28661 , vital:74492
- Description: Competition and access to financial services are lauded as key ingredients in the fight against poverty. While competition enhances markets, fosters innovation, productivity and growth, financial inclusion allows the poor to save, access credit and insurance thereby allowing them to meaningfully contribute to economic growth and also smooth their consumption. Moreover, competition reduces the cost of finance, thereby further expanding the availability of financial services. This suggests an important relationship between competition in the banking sector and financial inclusion. Research in this area is still in its infancy and little consensus exists on both whether the relationship is a robust one or not. There is no unanimity on the direction of causality or whether competition in the financial sector is good or bad for markets. This study examines the nexus between banking competition and financial inclusion in Upper-middle income countries. It employed a panel data set over the period 2011-2017 and Generalized Methods of Moments technique was employed to answer this enquiry. The findings of this study suggest that market power is not bad for financial inclusion in upper-middle income countries. Moreover, the study found that bank competition does not matter in banking the unbanked population in Upper-middle income countries. The implication of the findings of this study is that the focus of the policy makers should not be on policies that reduces concentration and market power in the banking sector, but be on measures that encourages contestability. The threat of entry is sufficient to make banks behave in a competitive manner. , Thesis (PhD) -- Faculty of Management and Commerce, 2023
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- Date Issued: 2023
Transformation in the South African Banking Industry
- Authors: Nokanda, Abongile
- Date: 2022-04
- Subjects: Banks and banking -- South Africa
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/58091 , vital:58550
- Description: Transformation is a deliberate plan of action to change historical racial and gender disadvantages. Transformation is also a fundamental necessity in South Africa as it seeks to address the injustices of apartheid while enhancing economic inclusiveness and promoting diversity in the working environment. The progress of transformation remains slow in South Africa, particularly in management and leadership positions in companies within the South African Banking Sector Therefore, it is quite clear that inequality, discrimination and a lack of transformation in South Africa need to be addressed, as the inequality gap has remained the same, even after the abolition of apartheid. However, the Western Cape is a province that is considered to practice and protect apartheid policies that perpetuate racial, gender and spatial disparities. This study, therefore, sought to investigate the transformation of banks in the Western Cape. The study followed a deductive approach and used an online survey as a data collection tool. At the time of study, the population of the study were employees of banks in the Western Cape and who were permanently employed. Additionally, the aim of this research was to investigate the influence of the Employment Equity Act, Skills Gap, Leadership Accountability and Human Resource Development in driving transformation in the banking sector of the Western Cape region in South Africa. The empirical results of the study were obtained from 105 bank employees located in the Western Cape. The Employment Equity Act, Leadership Accountability and Human Resource Development were the strongest independent variables. The Employee Development was an independent variable that emerged from the respondents. The findings of the study indicated that Employment Equity Act, Leadership Accountability, Employee Development and Human Resource Development had a significant, positive relationship with Transformation. The study also revealed the Skills Gap as the only independent variable that had an insignificant impact on Transformation. The recommendations were made to the Western Cape Banks to implement and continue to: drive the implementation of the EE Act; for leaders to be held accountable when it comes to driving transformation; banks to establish and facilitate employee development programs and for human resource to identify, retain and promote talented employees. This will therefore lead to a better performing and transformed banking sector. , Thesis (MA) -- Business and Economic science, 2022
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- Date Issued: 2022-04
Customer loyalty programmes in the South African banking sector
- Authors: Mashau, Mulanga Lawrence
- Date: 2020
- Subjects: Banks and banking -- South Africa , Customer loyalty programs -- South Africa
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: http://hdl.handle.net/10948/48883 , vital:41167
- Description: This treatise explores factors that drive customer participation in banking loyalty programmes in South Africa. The literature review conducted revealed research is required in this area. The lack of research in this field led to the formulation of the problem statement for the study, which focuses on critical factors that drive customer participation in banking loyalty programmes in South Africa. There have been numerous studies conducted on customer loyalty as a concept. There is, however, a lack of studies on customer loyalty in banking loyalty programmes. The literature review explored definitions of customer loyalty, how they pertain to loyalty programmes, with attitudes and behaviours identified as customer loyalty intermediate factors. This study has approached the assessment of customer loyalty in the banking loyalty programmes by exploring the factors that influence or drive customer participation in loyalty programmes in South Africa. The study was conducted using exploratory factor analysis of loyalty programme measurement items that evaluated attitudes and behaviours related to customer loyalty. The factor analysis was undertaken using data gathered from a self-administered online questionnaire. This treatise is part of a bigger study of loyalty programmes and customer loyalty in different sectors. The sample for this study was randomly selected using snowball and convenience sampling. A sample size of n=613 was used in this study. As part of the data analysis, descriptive statistics were used to compress and organise the sample data. Inferential statistics were used to project the findings of the sample data to the full population. The study concluded that flexibility in the context of rewards not expiring was the most important factor that consumers considered when deciding to participate in a banking loyalty programme. This was followed by reward type. The study revealed that banking loyalty programme customers prefer monetary rewards over all reward types for participation in banking loyalty programmes and thus reward type is deemed as a critical factor in customers’ decisions to participate in banking loyalty programmes. The study also found that banking loyalty programme customers do not perceive reward programme communication methods as an important factor influencing their decision to participate in a banking loyalty programme.
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- Date Issued: 2020
The financial soundness of selected banks in South Africa: a camels rating system approach
- Authors: Manga, Rushil Mohan
- Date: 2019
- Subjects: Bank failures -- South Africa , Banks and banking -- Risk management , Banks and banking -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/40889 , vital:36258
- Description: Bank failure continues to feature in South Africa and although it is not uncommon, nor limited to any single country, it has the potential to have significant systemic risks. It is, therefore of the utmost importance to mitigate bank failure where possible. Bank supervision plays a key role in ensuring that individual banks, and the banking sector, remain sound. This study analysed seven selected banks in South Africa namely, ABSA, African Bank, Capitec Bank, FirstRand Bank, Nedbank, Standard Bank and VBS Mutual Bank. The CAMELS rating system was applied to evaluate the component and composite ratings for each selected bank. The empirical evidence exhibited that the CAMELS model has been used world-wide and proved valuable in its simplicity and reliability. The results showed that all banks achieved a rating of three or fair, with the exception being African Bank. African Bank, rated four or marginal, continues to struggle to regain market confidence since its cu0ratorship and restructuring. The study further showed that among the selected banks, management quality and liquidity were two components that consistently showed critical weaknesses, which posed concerns for formal supervision. The study utilised One-way ANOVA (Analysis of Variance) to analyse the results of the CAMELS model. It was found that there was no significant difference in the financial soundness of the selected banks as a measure of the CAMELS model. The study further recommended that the banks invest and focus on developing human resource departments to attain and retain high quality managers in terms of qualifications and experience. The banks’ internal policies need to align, not only with the company’s business targets, but also the personal contentment and fulfilment of employees and managers. This will help reduce frictional unemployment in the banking sector. It must be noted that Capitec was the only bank to avoid a marginal or weak rating in the management quality component. To address the poor rating awarded to the liquidity component in all selected banks, it is recommended that senior management, regulators and supervisors need to work together to implement sound liquidity management practices. The CAMELS model presents a clear depiction of the financial soundness of a bank and can be comparable to other competitive banks within a country. For this reason, the model would be easily understandable, not only to supervisors and senior management, but also investors, stake-holders, their customers and the general population. It is therefore recommended that the SARB publishes a detailed annual report, which analyses all banks in South Africa by way of the CAMELS model.
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- Date Issued: 2019
The future of banking in South Africa towards 2055: disruptive innovation scenarios
- Authors: Koekemoer, Jonathan
- Date: 2019
- Subjects: Finance -- South Africa , Economic development -- South Africa , Banks and banking -- South Africa
- Language: English
- Type: Thesis , Doctoral , DPhil
- Identifier: http://hdl.handle.net/10948/40577 , vital:36184
- Description: The research effort developed four possible scenarios for the future of banking in South Africa towards 2055. The scenarios sought to stimulate thought on the possible, probable, plausible and preferred effects of disruptive innovation and regulation in the South African banking sector. The scenarios were developed in strict accordance with the 5 stages, and 9 steps, of the scenario-based planning process of futures studies. A conceptual futures studies model for banking in South Africa was developed to guide and clarify the way in which the research on South African banking can be integrated into the body of existing futures studies theory. The research study began with a comprehensive environmental scan, where various megatrends and driving forces are identified. A PESTEL analysis provided a deeper understanding of the driving forces. A Real-Time Delphi study was conducted in order to validate and prioritise the megatrends and driving forces that emerged. As a result, the research study was able to present four plausible scenarios that provide a better understanding of the future of banking in South Africa over the decades to come. The research presents banking as a complex, multi-faceted sector that is heavily influenced by advances in technology. The Real-Time Delphi research allowed the aggregation of expert knowledge. This is used as a guide to assist decision-makers and industry leaders in the adoption of appropriate business models and strategies towards a preferred future state. The research defined the Integrated Vision as the preferred future state for the South African banking sector towards 2055. The study closes a research gap where current strategies deviate from proposed strategies that drive the achievement of the Integrated Vision by 2055. Finally, contextually aligned practical recommendations are provided to assist decision-makers, industry leaders and change agents to work towards a preferable future state. The proposed recommendations are placed into broad categories of innovation, financial inclusion and collaborative regulatory relationships. The research makes a meaningful contribution to the South African banking sector by introducing a forward-looking, systems-thinking approach to disruptive innovation and regulation in the South African context.
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- Date Issued: 2019
The impact of monetary policy on profitability of four major banks in South Africa
- Authors: Nyakombi, Kulasande Dolly
- Date: 2018
- Subjects: Monetary policy -- Econometric models , Financial services industry -- South Africa , Banks and banking -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/33589 , vital:32890
- Description: This study examines the effect of monetary policy on the profitability of the four major banks in South Africa, namely; Standard Bank, Ned bank, ABSA and FNB. The annual data used is for the period of 1999 to 2015, the study use Pooled OLS effects and Fixed effects to investigate the impact of Monetary Policy on Bank Profitability using Return on Assets as profitability measure. Empirical results indicate that monetary policy proxies by repo rate and lending rates were found to have no significant impact on bank profitability in the four major South African banks.
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- Date Issued: 2018
Competition factors influencing client switching behaviour within the commercial banking industry
- Authors: Mathiyase, Kholiswa
- Date: 2017
- Subjects: Banks and banking -- South Africa , Competition -- South Africa , Financial services industry -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/45366 , vital:38574
- Description: Banks are faced with challenges of retaining clients and preventing them from switching to competitors. For many years the South African banking industry has been dominated by the big four banks that were not known to be client focused. The banks were also known for serving only the middle and high-income earners, with the banks having a high and non-transparent banking fee structure. As a result, Capitec Bank was established in 2001 and differentiated itself from the traditional ways of providing banking service. One of their value propositions, Capitec Bank provided low and transparent banking fees, provided a unique personalised service to cater for the unbanked market and is gradually serving the middle and high-income market as well. Capitec Bank managed to establish its presence in the South African banking industry despite the dominance of the big four banks. The banking industry environment has also been subjected to a number of changes, including the entrants of other non-traditional banks, changing client behaviour, technology, regulatory and political reforms and the current depressed economic conditions.
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- Date Issued: 2017
A study exploring the relationship between employee happiness and financial performance within a South African financial institution
- Authors: Waugh, Geoffrey William
- Date: 2014
- Subjects: Financial institutions -- South Africa , Employee motivation , Financial institutions -- Ratings and rankings , Banks and banking -- South Africa , Bank employees -- South Africa , Job satisfaction
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:827 , http://hdl.handle.net/10962/d1012080
- Description: This research is an investigation of the relationship between employees 'happiness' and the financial performance of a financial services organisation in South Africa. As a component of the financial services industry the banking sector contributes greatly to the economic growth of the country. The South African Banking sector is concentrated and highly competitive. It is vital for banks to maintain competitiveness and ever increasing global competition adds further pressure on organisations to financially perform so as to meet the demands of their shareholders. The literature that has been reviewed and previous research suggest that employee 'happiness' is a vital variable influencing the performance and success of individuals. Organisational performance will be measured in terms of financial performance for the purposes of this research. The concept of financial performance and 'happiness' are discussed and a questionnaire based on the Satisfaction With Life Scale (Diener et al,1985) is used to determine the levels of 'happiness' at selected branches within the institution. The individual branches financial performance is determined via calculating selected ratios, namely cumulative leverage, cost to income ratio and net yield. An analysis of correlation was conducted to establish whether or not a relationship of statistical significance exists between employee 'happiness' and financial performance. It was concluded that there is no relationship of statistical significance between employee 'happiness' and the financial performance of branches within the organisation, it was suggested that other factors exert a much greater influence over financial performance. Some of these factors influencing financial performance are discussed and recommendations for further research are made.
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- Date Issued: 2014
The functioning of the interbank market and its significance in the transmission of monetary policy
- Authors: De Angelis, Catherine
- Date: 2013-06-11
- Subjects: South African Reserve Bank , Monetary policy -- South Africa , Foreign exchange rates -- South Africa , Money market -- South Africa , Banks and banking -- South Africa , Repurchase agreements -- South Africa , South Africa -- Economic policy , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1075 , http://hdl.handle.net/10962/d1008054 , South African Reserve Bank , Monetary policy -- South Africa , Foreign exchange rates -- South Africa , Money market -- South Africa , Banks and banking -- South Africa , Repurchase agreements -- South Africa , South Africa -- Economic policy , South Africa -- Economic conditions
- Description: Monetary policy in South African is the primary means by which the authorities can influence activity in the overall economy. The South African Reserve Bank accommodates banks through repo transactions for which they charge the repo rate. The most important market in the transmission of the repo rate to the rest of the economy is the interbank market. As such, a detailed discussion of this market is given. In September 200 I the monetary authorities made certain adjustments to the repo system of accommodation, which included changing the repo rate from a floating rate to a fixed rate that would be administratively determined by the MPC. This was done to address certain weaknesses in the floating rate system. This thesis examines and compares the period before and after the adjustments to the repo system, with the aim of determining whether or not the monetary authorities achieved the goals intended from making this change. The repo rate, prime interbank rate, 3-month NCO rate and the prime lending rate are analysed using the Engle-Granger two variable approach and an ECM model to test for causality. It was found that the monetary authorities did not achieve their intended goals as the relationship between the repo rate and the interbank rate was more significant in the first period. Furthermore, the direction of causality the authorities hoped to achieve by implementing the changes were in fact already in place. As such the adjustments to the system changed the transmission mechanism from the one desired by the authorities to one that was not intended. The conclusions reached by this study show that, in terms of the objectives of the monetary authorities, the previous repo system functioned better. , KMBT_363 , Adobe Acrobat 9.54 Paper Capture Plug-in
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A strategic analysis of Capitec Bank Limited within the South African banking industry
- Authors: De Lange, Michael Coenraad
- Date: 2013
- Subjects: Banks and banking -- South Africa , Creative ability in business -- South Africa
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:8835 , http://hdl.handle.net/10948/d1019932
- Description: The South African banking industry is well regulated and oligopolistic by nature. The financial sector in South Africa is of a world class standard, comparing favourably to that of developed countries i.e. United States of America and Great Britian, and developing economies such as the BRIC (Brazil, Russia, India and China) countries. The South African financial sector possesses the critical elements to exhibit good growth and sustainable profitabiblity. Capitec Bank Limited revolutionised the banking industry by providing a simplified and cost effective banking solution targeting the masses i.e. the "unbanked" population of South Africa. The company pursued a disruptive innovation strategy by targeting the lower income earning segment of the market i.e. individuals who are employed but do not have bank account. Capite's strategic approach and business model were designed around innovation and technology, exploiting a previously untapped market that no other competitor targeted. This approach has resulted in the bank's phenomenal growth over the past decade and most notably has seen Capitec's return on equity (ROE) increase from 12 percent to 26 percent and advances to costomers increase from R116 million to 16 billion. This has set precedent which the big four banks, namely ABSA, First National Bank, Standard Bank and Nedbank, could not match. Contributing to Capitec's success and the basis on which its business model is built are four pillars: accessibilty, simplicity, affordability and personalised service. These pillars have created a compatitive advantage resulting in the bid four banks playing catch up. A strategic analysis of Capitec bank was conducted in order to assess the feasibility of expansion by the bank into Africa. The conclusion of the study indicated that it was indeed a viable option for Capitec to expand its footprint across borders into Africa through mergers with banks exhibiting a similar business model, for example Equity Bank based in Kenya.
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- Date Issued: 2013
An analysis of the long run comovements between financial system development and mining production in South Africa
- Authors: Ajagbe, Stephen Mayowa
- Date: 2011
- Subjects: Economic development -- South Africa , Econometric models , Mineral industries -- Economic aspects -- South Africa , South Africa -- Economic conditions , South Africa -- Economic policy , Principal components analysis , Cointegration , Stock exchanges -- South Africa , Banks and banking -- South Africa , Foreign exchange rates
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:955 , http://hdl.handle.net/10962/d1002689 , Economic development -- South Africa , Econometric models , Mineral industries -- Economic aspects -- South Africa , South Africa -- Economic conditions , South Africa -- Economic policy , Principal components analysis , Cointegration , Stock exchanges -- South Africa , Banks and banking -- South Africa , Foreign exchange rates
- Description: This study examines the nature of the relationship which exists between mining sector production and development of the financial systems in South Africa. This is particularly important in that the mining sector is considered to be one of the major contributors to the country’s overall economic growth. South Africa is also considered to have a very well developed financial system, to the point where the dominance of one over the other is difficult to identify. Therefore offering insight into the nature of this relationship will assist policy makers in identifying the most effective policies in order to ensure that the developments within the financial systems impact appropriately on the mining sector, and ultimately on the economy. In addition to using the conventional proxies of financial system development, this study utilises the principal component analysis (PCA) to construct an index for the entire financial system. The multivariate cointegration approach as proposed by Johansen (1988) and Johansen and Juselius (1990) was then used to estimate the relationship between the development of the financial systems and the mining sector production for the period 1988-2008. The study reveals mixed results for different measures of financial system development. Those involving the banking system show that a negative relationship exists between total mining production and total credit extended to the private sector, while liquid liabilities has a positive relationship. Similarly, with the stock market system, mixed results are also obtained which reveal a negative relationship between total mining production and stock market capitalisation, while a positive relationship is found with secondary market turnover. Of all the financial system variables, only that of stock market capitalisation was found to be significant. The result with the financial development index reveals that a significant negative relationship exists between financial system development and total mining sector production. Results on the other variables controlled in the estimation show that positive and significant relationships exist between total mining production and both nominal exchange rate and political stability respectively. Increased mining production therefore takes place in periods of appreciating exchange rates, and similarly in the post-apartheid era. On the other hand, negative relationships were found for both trade openness and inflation control variables. The impulse response and variance decomposition analyses showed that total mining production explains the largest amount of shocks within itself. Overall, the study reveals that the mining sector might not have benefited much from the development in the South African financial system.
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- Date Issued: 2011
Monetary policy transmission in South Africa: a comparative analysis of credit and exchange rate channels
- Authors: Sebitso, Nathaniel Maemu
- Date: 2011
- Subjects: Monetary policy -- South Africa , Foreign exchange market -- South Africa , Financial crises -- South Africa , South Africa -- Economic conditions , South Africa -- Economic policy , Banks and banking -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1129 , http://hdl.handle.net/10962/d1020851
- Description: This thesis focuses on monetary policy transmission and particularly seeks to examine the impact of credit and exchange rate channels of monetary policy transmission in the South African economy. South Africa's monetary policy has gone through several changes over the past thirty years. In this respect, there is a need for robust empirical evidence on the effects of these channels on inflation and output. The thesis employs a structural vector autoregressive (SVAR) model to identify monetary transmission in South Africa for the period 1994:q4 - 2008:q2. The form of the SVAR used in this thesis is based on the fact that South Africa is a small open economy, which means that external shocks are an important driver of domestic activity. The impulse responses and variance decomposition results show that the repo rate, credit and exchange rate play a role in terms of their impact on inflation and output. The dynamic responses to the identified monetary policy shock are consistent with standard theory and highlight the importance of the interest rate channel. A shock to the interest rate, increasing it by one standard deviation, results in a persistent fall in credit. The response of output is immediate as it falls and bottoms out within the second year. Inflation shows a lagged response, it is positive within the first year as the exchange rate depreciates but in subsequent quarters inflation responds negatively as expected. Inflation falls and reaches a minimum by approximately eight quarters then moves towards baseline. The exchange rate shows delayed appreciation. The shock to the repo interest rate leads to an immediate depreciation of the exchange rate in the first two quarters as output declines, followed by an appreciation in the third and sixth quarter. Due to larger error bounds the impact of the repo rate on the exchange rate could be less effective within the first two years. The impulse responses suggest that monetary policy plays an effective role in stabilising the economy in response to a credit shock, notwithstanding large standard error bounds. Hence, the monetary authority reacts by increasing the repo rate as a result of inflation. The impact of credit on output is positive but is offset to some extent by the rising repo rate. In response to the rand appreciation, the monetary authority reduces the repo rate significantly during the first year with the maximum impact in the second year and then returns to baseline thereafter. Therefore the monetary authority reduces the repo rate, probably to stabilise falling inflation. The result shows that inflation falls as a result of the rand appreciation. A shock to the exchange rate causes a rise in output, though small in magnitude, which is persistent but reaches baseline at the end of the period. This result could reflect the effects of the resultant fall in the repo rate and a persistent rise in credit over the whole period, which tends to increase output. The exchange rate shows an obvious and stronger immediate impact on inflation compared to credit impact on inflation. However, the credit shock has an obvious and stronger impact on output compared to an exchange rate impact on output. However, the large standard error bounds may imply that credit and exchange rate channels are not as effective in the short run. It is important to note that the results are based on the SVAR model estimated with percentage growth rate of the variables. The variance decomposition result is in line with the impulse responses and shows that the exchange rate and credit channels could be important transmission channels in South Africa over the chosen sample period. The exchange rate and credit shocks show a stronger effect on inflation than on output, looking at both the impulse responses and variance decomposition results. The reaction of the repo interest rate to the credit and exchange rate shocks comes out as expected. The repo rate increases as a result of an increase in the credit and falls as a result of the currency appreciation.
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- Date Issued: 2011
Risk management
- Authors: Derrocks, Velda Charmaine
- Date: 2010
- Subjects: Risk management -- South Africa , Banks and banking -- South Africa , Financial risk management -- South Africa , Risk management -- South Africa -- Decision making
- Language: English
- Type: Thesis , Masters , MA
- Identifier: vital:8633 , http://hdl.handle.net/10948/1480 , Risk management -- South Africa , Banks and banking -- South Africa , Financial risk management -- South Africa , Risk management -- South Africa -- Decision making
- Description: The objective of the study is to establish a perspective of risk management by doing an assessment of current risk management practices, especially in the aftermath of the 2008/2009 global financial crisis. Risk management, as a component of corporate governance, was analysed by addressing the following: - The nature of value-creating assets in business; - The primary challenges for risk management over the next three years; - The changing approaches towards risk management; - The role of legislation and external stakeholders; - The role of risk management in strategic planning; - The cost of risk management; and - The benefits of improved risk management capabilities. A survey was conducted in the form of a questionnaire in order to obtain primary information from business owners on the current role of risk management in their organisations as well as their view on the role of risk management going forward. Businesses operating in the Port Elizabeth and surrounding area with an existing relationship with Absa Business Banking Services participated in the study. Quantitative techniques were used to analyse the data that were obtained from the sample group. The study revealed that the role of risk management in enterprises is evolving into an integrated, enterprise wide risk management function that can be utilised as a source of competitive advantage, from both a funding perspective for Banks and a business perspective for business owners. Capitalising on risk management as a competitive advantage will ultimately lead to long term sustainability and profitability of South African business enterprises and the South African Banking system.
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- Date Issued: 2010
The impact of economic downturn on black economic empowerment and banks
- Authors: Daniels, Sinclair Lonwabo
- Date: 2010
- Subjects: South Africa -- Economic conditions -- 21st century , South Africa -- Economic conditions , Business enterprises, Black -- South Africa , Blacks -- Employment -- South Africa , Employee empowerment -- South Africa , Banks and banking -- South Africa
- Language: English
- Type: Thesis , Masters , MBA
- Identifier: vital:8620 , http://hdl.handle.net/10948/1505 , South Africa -- Economic conditions -- 21st century , South Africa -- Economic conditions , Business enterprises, Black -- South Africa , Blacks -- Employment -- South Africa , Employee empowerment -- South Africa , Banks and banking -- South Africa
- Description: The purpose of this treatise is to ascertain the impact of economic downturn on Black Economic Empowerment (BEE) and Banks. This has been sparked by the huge speculations in the market as to what will happen to BEE and how will the banks cope in general with the impact of this scourge. It is imperative to understand the influence of the 2008+ economic downturn on socio-economic reconstruction and development in South Africa and the black economic empowerment and its funding mechanisms. The treatise has two phases the, namely the theoretical phase and a bit of narrative phase. In the theoretical phase the research study interrogates what the literature review reveals about the economic downturn, BEE as well as performances of different banks across the world. This shows the economic impact that the banks have had to endure during the economic downturn. This resulted in stock markets losing their value. The dividend earners were significantly affected including a sizeable number of BEE companies. The BEE companies are perceived to be too reliant on debt on to finance their deals and this treatise will look at various options of financing a BEE deal and what is deem to the most suited financing structure. The narrative phase involves semi-structured interviews that were conducted in order to ascertain the real impact that South African were faced with and how they have managed to steer clear of the turbulent waters. This also looked at how the BEE consultant views the current occurrences in the market.
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- Date Issued: 2010
Bank credit extension to the private sector and inflation in South Africa
- Authors: Dlamini, Samuel Nkosinathi
- Date: 2009
- Subjects: Bank loans -- South Africa , Inflation (Finance) -- South Africa , Money supply -- South Africa , Interest rates -- South Africa , Banks and banking -- South Africa , Foreign exchange rates -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:959 , http://hdl.handle.net/10962/d1002693 , Bank loans -- South Africa , Inflation (Finance) -- South Africa , Money supply -- South Africa , Interest rates -- South Africa , Banks and banking -- South Africa , Foreign exchange rates -- South Africa
- Description: This study investigates the contribution of bank credit extension to the private sector to inflation in South Africa, covering the period 1970:1-2006:4. The long-run impact of bank credit on inflation is investigated by means of the Johansen co integration model. The short-run ynamics of the inflation is subsequently modelled by means of the Vector Error Correction Model (VECM). Using the Johansen methodology, the study identifies two co integrating equations linking inflation and its eterminants. The results suggest that the long-run relationship between inflation and bank credit to the private sector is negative and statistically significant at 10% level. The determinants that are significant at 5% level are: money supply, real gross domestic product, the money market rate, rand/dollar exchange rate and imports. The results are consistent with previous findings. The speed of adjustment in response to deviation from the equilibrium path was found to be negative at 10.56% per quarter, which is consistent with findings by Ohnsorge and Oomes (2003) for Russia. Both the signs and the magnitude of the coefficients suggest that the co integrating vector describes a long-run inflation equation. The impulse response functions confirm the theoretical expectations except for the import prices. The most persistent and significant shocks observed are on impulse response functions of money supply and bank credit to the private sector. The variance decomposition results also suggest that inflation responds quicker to innovations from money supply and the money market rate. The overall results provide evidence that the surge in inflation is associated with an increase in money supply as well as the instability in exchange rate. The effects of exchange rate fluctuation on inflation are reflected through changes in import prices. Based on the results we conclude that an increase in bank credit during the period 1970:1-2006:4 had a negative mpact on inflation in South Africa.
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- Date Issued: 2009
An analysis of exchange rate pass-through to prices in South Africa
- Authors: Karoro, Tapiwa Daniel
- Date: 2008
- Subjects: Foreign exchange rates -- South Africa , Monetary policy -- South Africa , Inflation (Finance) -- South Africa , Prices -- South Africa , Banks and banking -- South Africa , South Africa -- Economic policy
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:953 , http://hdl.handle.net/10962/d1002687 , Foreign exchange rates -- South Africa , Monetary policy -- South Africa , Inflation (Finance) -- South Africa , Prices -- South Africa , Banks and banking -- South Africa , South Africa -- Economic policy
- Description: The fact that South Africa has a floating exchange rate policy as well as an open trade policy leaves the country’s import, producer and consumer prices susceptible to the effects of exchange rate movements. Given the central role that inflation targeting occupies in South Africa’s monetary policy, it becomes necessary to determine the nature of influence of exchange rate changes on domestic prices. To this end, this thesis examines the magnitude and speed of exchange rate pass-through (ERPT) to import, producer and consumer prices in South Africa. Furthermore, it explores whether the direction and size of changes in the exchange rate have different pass-through effects on import prices, that is, whether the exchange rate pass-through is symmetric or asymmetric. The paper uses monthly data covering the period January 1980 to December 2005. In investigating ERPT, two main stages are identified. The initial stage is the transmission of fluctuations in the exchange rate to import prices, while the second-stage entails the pass-through of changes in import prices to producer and consumer prices. The first stage is estimated using the Johansen (1991) and (1995) cointegration techniques and a vector error correction model (VECM). The second stage pass-through is determined by estimating impulse response and variance decomposition functions, as well as conducting block exogeneity Wald tests. The study follows Wickremasinghe and Silvapulle’s (2004) approach in estimating pass-through asymmetry with respect to appreciations and depreciations. In addition, the thesis adapts the analytical framework of Wickremasinghe and Silvapulle (2004) to investigate the pass-through of large and small changes in the exchange rate to import prices. The results suggest that ERPT in South Africa is incomplete but relatively high. Furthermore, ERPT is found to be higher in periods of rand depreciation than appreciation which supports the binding quantity constraint theory. There is also some evidence that pass-through is higher in periods of small changes than large changes in the exchange rate, which supports the menu cost theory when invoices are denominated in the exporters’ currency.
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- Date Issued: 2008