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BL Premium reports that the Prudential Authority (PA), the regulator of SA’s financial services sector, says foreign banks operating in SA often face a compliance minefield.
Accordingly, these banks are now increasing their employment of locals who understand the lay of the land. The regulator said in its latest annual report: “The branches of foreign banks have maintained relatively healthy levels of profitability, capital and liquidity, with continued support from their respective head offices. However, these branches often face compliance challenges when implementing directives issued by the PA, partly due to their reliance on their head office. Notably, there has been an increased focus on appointing senior executives with SA risk, compliance and regulatory experience at these branches.” The PA earlier this year successfully liquidated the local branch of Pakistani lender Habib Bank after the National Treasury placed it under curatorship over governance issues. The watchdog said it was consistently enhancing the regulation, oversight and monitoring of foreign representative offices, adding that it was committed to creating a supportive environment for foreign banking institutions’ representative offices operating in SA. The regulator flagged smaller banks and indicated that “succession planning has been highlighted as a crucial factor in ensuring that a pool of experienced and qualified bankers are readily available to smaller banks that often struggle with recruiting and retaining such talent.”
- Read the full original of the report in the above regard by Kabelo Khumalo at BusinessLive (subscriber access only)
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