SARB affected by global economic crisis, says Mboweni

Thursday, September 17, 2009

Pretoria - The South African Reserve Bank (SARB) did not go unaffected by the global financial meltdown in the last financial year, according to the bank's Governor, Tito Mboweni.

"Low yields on prime investments and the collapse in prices of many traded financial instruments caused a decline in net income after tax from R2.5 billion in the previous financial year to R0.9 billion in the 2008/09 financial year," said the outgoing governor.

Mboweni said this was despite the bank's total assets increasing from R300 billion at the end of March 2008 to R344 billion at the end of March 2009.

The meltdown also affected the South African banking environment during 2008 and the first half of 2009 with a significant decliner in the rate of growth in loans and advances.

"Furthermore, increasing pressure on consumers continues to be clearly evident in the marked increase in impaired advances and rising credit impairments which impact negatively on the earnings of banks."

However, he said that the South African banking system remained stable and banks were adequately capitalized.

Mboweni said there were tentative signs of South Africa's recovery from the recession.

"Our understanding is that there are tentative signs here and there that we might see a recovery in the next couple of months ... so we will indeed partially agree with those who say that some positive signs are on the horizon."

However, he said he needed to be careful not to overstate that the recovery in South Africa was going to lag.

Meanwhile, in a further bid to combat counterfeiting, a process to introduce a new series of banknotes and coins, with new themes and improved security features, has been initiated.

"It is envisaged that the new currency will be launched by mid-2013," said the governor.

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