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South Africa has a lot going for it as a financial hub for Sub-Saharan Africa. It has deep and liquid debt and equity markets, strong institutions, the rule of law, transport links to most of the continent, and expansive local companies who provide a natural client base for South African banks building a presence in the region.
But is the country taking the best possible advantage of the situation? There is a feeling in South Africa that there is more potential than is being addressed.
Perhaps the clearest evidence of South Africa as a regional financial hub can be found in one of its banks: Standard Bank, which has offices or subsidiaries in in 19 countries across Africa. Along with Togo-headquartered Ecobank, it is the closest thing that can be found to a truly universal pan-African banking group. Barclays, too, clearly sees the potential of a regional business hubbed out of South Africa, having absorbed the South Africa-based group Absa in 2013; today called Barclays Africa Group and 62.3% owned by Barclays Bank, it has majority stakes in banks in 10 African nations and representative offices in two more. To varying degrees, Standard Chartered and HSBC both use South Africa as a base to serve other markets; Nedbank, in a different approach, has had a strategic banking alliance with Ecobank since 2008 (it is also a 20% shareholder), giving it representation through Ecobank’s 2,000 branches across 36 countries.
“The pioneering path has already been laid,” says Goolam Ballim, chief economist and global head of research at Standard Bank. “South African financial services is globally recognised as top tier in terms of its robustness, quality of governance, and its credibility and legitimacy as an industry.”
