Yet another possibility that has been mooted for Nedcor is the acquisition of Boland Bank, a retail bank owned by BOE,which recently announced a limited reorganisation. Meanwhile, Investec, South Africa s fifth-largest bank, does not rule out a domestic acquisition, although it seems unlikely considering its current goals. But it depends on opportunities from the shake-out in banking here. There will also be an active mergers and acquisitions markets in South Africa s second-tier financial institutions, as some have suffered liquidity problems, while others are not finding it that easy to make decent profits. South African banks are also facing challenges from Internet banking and non-financial institutions.
Bankers acknowledge the threat from the former and dismiss the threat from the latter.
They fear new entrant, virtual banks with cost-income ratios of 20 per cent. All the large banks have different degrees of Internet capabilities. Many, including Nedcor, First Rand and Absa, are still considering whether to set up a separate Internet bank. However true this is, South Africa s banks appear too complacent. Financial Times Business Ltd. All rights reserved.