P e r s p e c ti v e

extract from MMS Service 08-Apr-02

Banking crises not only a SA phenomenon 08-April-02
     
Over the last few years South Africa has had many Tier 2 banks fail. This has quiet often been attributed to the country being overbanked or poor corporate governance. This Tier 2 section is rather vunerable and market concentration will force them to merge, shrink or die. European Tier 2 banks are in the same predicament according to a study by Oliver Wyman a New York group of Management consultants. Banks that are champions in their own country have found it difficult to break into business offered worldwide by the likes of the Global behemoths such as Citigroup which offers a complete range of services. Citigroup was built by mergers. With globalisation being a reality, companies require banks with a global strength and understanding of the various market conditions. ABN AMRO made a gallant effort in the US, but announced 2 weeks back a reduction in it's investment banking there, they simply couldn't build up enough volume. SA Banks could look to cross border mergers, this would provide them with the necessary critical mass. SA companies are looking to international markets - the bank with the best overall service will win.

 

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e c o n o m e t r i x 08-April-02