The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Facing up to the foreigners

The new dawn in South Africa is not an unmixed blessing for its banks. They now have to face foreign competitors muscling in on a sector they previously monopolized. But with their strong networks and increasing overseas resources, local banks are finding that alliances with foreign institutions can be mutually beneficial. Bruce Cameron reports

When the South African government announced last month that HSBC Investment Bank was to be its adviser on privatization, it took the wind out of the sails of the major domestic banks. There was, though, still a local connection: HSBC subsidiary James Capel recently bought South African stockbroker Simpson McKie, now Simpson McKie James Capel.

The snatching of the one-year advisory deal does not mean that South African banks are being altogether sidelined as foreign competition builds up. But it does show that local bankers no longer have it all their own way, which had been the case since such foreign banks as Barclays and Standard Chartered withdrew at the height of the sanctions and sold out extensive local operations.

Since the April 1994 elections, 55 foreign banks have set up operations in South Africa, while others enter and leave on ad hoc tasks in what the local bankers call "parachute operations". None of the foreigners has so far attempted to get into the retail market. Local bankers believe only Citibank is capable of doing so, but doubt that it will at this stage.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree