Banking environment
An intense focus on bank fees, increasing regulatory pressures and tightening economic conditions dominated the banking landscape in 2007.
The Competition Commission inquiry into bank pricing continued throughout the year, with all major industry players providing written submissions and participating in public hearings. The inquiry process has been completed and the recommendations are expected to be released in the first quarter of 2008.
Nedbank fully endorses the transparent process followed by the Competition Commission and supports the need to make banking more affordable and accessible to all South Africans. This is evidenced by a reduction in retail bank fees for two years in a row, making Nedbank the most affordable of the big four banks in the lower-income and mass markets.
Rising inflation, the high individual debt burden and the increase in interest rates resulted in a slowdown in consumer spending and increasing default rates. This trend is expected to intensify and broaden in the year ahead. On the positive side the growth in fixed-capital formation and government consumption expenditure resulted in renewed momentum in wholesale banking.
On the regulatory front Nedbank, along with its peers, invested significant resources to ensure compliance with the National Credit Act (NCA), which came into effect in June 2007. As the group considers itself a responsible lender, the NCA training was largely aimed at educating consumers and curbing overindebtedness. Nedbank has also signed a code of conduct with The Banking Association, governing lending and the extension of credit, with this voluntary code moving banks beyond the requirements of the NCA.
Basel II regulations were introduced into the South African banking environment from 1 January 2008 to promote the enhancement and sophistication of risk and capital measurement and management. The technical team leading Nedbank's Basel II project is to be complimented for its role in successfully implementing these new regulations.
Extract from Chairman's statement in the 2007 Annual report
| This page was updated on 21 August, 2008 |  Return to top |
For Nedbank products, services and branch details please visit www.nedbank.co.za.