Our major banks have all grown their earnings faster than the market over the long term, and the banking sector overall has done well for all stakeholders. Weak economic growth and political instability are legitimate concerns. Rating downgrades carry real economic consequences for banks through higher costs of capital and lower returns on equity. However, these concerns are well known and widely publicised. Importantly, however, the fundamentals underpinning the South African banking system have not changed. The sector remains a small, conservative and tightly regulated industry operating in a largely closed currency system. The performance of our banks during the global financial crisis is a testament to the stability of our banking system. In early 2009, at the trough of the crisis, the 320-year old Barclays plc (excluding its stake in Absa) - with more than 100,000 employees around the world and assets of £1.3-trillion - had a market value lower than Absa's (which at the time ha...
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