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
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
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