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by , at 03:00 pm, June 29, 2017, Business

Report: South African Banks Strongest in the World

Capitec Bank
Photo credit: Yahoo

South African banks have been ranked as the strongest in the world for the second year in a row by international banking advisory group Lafferty.

According to Lafferty Group’s 2017 “Global Bank Quality” benchmarking study issued on Monday, South African banks have held on to their position as the strongest in the world for a second straight year, reports BusinessLive.

The study, which ranked 100 major banks in 32 countries around the world, took in to consideration long-term stability and the quality of service in corporate and retail banking.

Five South African banks, including Capitec, First Rand, Absa (Barclays Africa), Nedbank, and Standard Bank, were considered in the study.

Capitec was again rated the best bank in the world, receiving the only five-star rating in the study. Absa received a four-star rating, while FirstRand, Nedbank, and Standard Bank all received three stars.

The banks performed well despite a decision by rating agencies S&P and Moody’s to downgrade South Africa’s domestic banks alongside a recent downgrade of the country’s credit rating to junk status in April.

Business experts say South African banks are well-respected throughout Africa and the rest of the world with Michael Lafferty, the chairman of Lafferty Group, saying global banks were increasingly looking for managerial solutions and expertise from within South Africa.

“When you look at the five together, the South Africans have a higher average score than the banks in any other country in the world,” Lafferty says.

Lafferty says the survey was largely aimed at banks themselves, rather than consumers or investors, enabling a benchmarking of bank management.

He notes further that six out of the top eight banks in the world were in “emerging markets,” with five of those banks in South Africa alone.

“Conversely, we have found that well-capitalized, conservatively managed, retail-focused banks that operate in developing economies can be higher quality than highly leveraged, unfocused banks,” Lafferty says.