The impact of the change from Basel II to Basel III on the profitability of the South African banking sector

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dc.contributor.advisorde Jager, Phillipen_ZA
dc.contributor.authorSadien, Ebrahimen_ZA
dc.date.accessioned2018-02-07T09:15:22Z
dc.date.available2018-02-07T09:15:22Z
dc.date.issued2017en_ZA
dc.description.abstractThe objective of this study is to analyse the impact of the change from Basel II to Basel III on the profitability of the South African banking sector. South African banks are regulated in accordance with the Basel Accords and, as such, this study reviews the literature on bank regulation and specifically the evolution of the Basel Accords. The 2008 global financial crisis exposed certain flaws in the global regulatory framework and paved the way for the introduction of Basel III, of which South Africa commenced implementation on 1 January 2013. As mentioned, the review of banking regulation literature will specifically focus on the changes from Basel II to Basel III, with a further focus on two of the key changes introduced by Basel III: the capital requirement amendments and the new liquidity ratios. The study examines the top five banks in South Africa, as these make up 91.1% of the industry's banking assets (as of December 2012). The top five banks are used to create a representative bank of the South African banking sector and an accounting model is performed using a DuPont analysis in order to measure profitability. With respect to the Basel III capital changes, the results show that a 2% increase in capital by increasing the equity-to-asset ratio and all else held equal will result in a decrease of 0.29% in return on equity (ROE) for the South African banking sector. With respect to the Basel III liquidity measures, a 25 basis decrease in maturity transformation, all else held equal, will translate into a 3.38% decrease in ROE. The study contributes to the recent literature on Basel III and profitability. The results will also benefit the South African banking industry and regulators when assessing the profitability impact of the new Basel regulations.en_ZA
dc.identifier.apacitationSadien, E. (2017). <i>The impact of the change from Basel II to Basel III on the profitability of the South African banking sector</i>. (Thesis). University of Cape Town ,Faculty of Commerce ,Department of Finance and Tax. Retrieved from http://hdl.handle.net/11427/27387en_ZA
dc.identifier.chicagocitationSadien, Ebrahim. <i>"The impact of the change from Basel II to Basel III on the profitability of the South African banking sector."</i> Thesis., University of Cape Town ,Faculty of Commerce ,Department of Finance and Tax, 2017. http://hdl.handle.net/11427/27387en_ZA
dc.identifier.citationSadien, E. 2017. The impact of the change from Basel II to Basel III on the profitability of the South African banking sector. University of Cape Town.en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - Sadien, Ebrahim AB - The objective of this study is to analyse the impact of the change from Basel II to Basel III on the profitability of the South African banking sector. South African banks are regulated in accordance with the Basel Accords and, as such, this study reviews the literature on bank regulation and specifically the evolution of the Basel Accords. The 2008 global financial crisis exposed certain flaws in the global regulatory framework and paved the way for the introduction of Basel III, of which South Africa commenced implementation on 1 January 2013. As mentioned, the review of banking regulation literature will specifically focus on the changes from Basel II to Basel III, with a further focus on two of the key changes introduced by Basel III: the capital requirement amendments and the new liquidity ratios. The study examines the top five banks in South Africa, as these make up 91.1% of the industry's banking assets (as of December 2012). The top five banks are used to create a representative bank of the South African banking sector and an accounting model is performed using a DuPont analysis in order to measure profitability. With respect to the Basel III capital changes, the results show that a 2% increase in capital by increasing the equity-to-asset ratio and all else held equal will result in a decrease of 0.29% in return on equity (ROE) for the South African banking sector. With respect to the Basel III liquidity measures, a 25 basis decrease in maturity transformation, all else held equal, will translate into a 3.38% decrease in ROE. The study contributes to the recent literature on Basel III and profitability. The results will also benefit the South African banking industry and regulators when assessing the profitability impact of the new Basel regulations. DA - 2017 DB - OpenUCT DP - University of Cape Town LK - https://open.uct.ac.za PB - University of Cape Town PY - 2017 T1 - The impact of the change from Basel II to Basel III on the profitability of the South African banking sector TI - The impact of the change from Basel II to Basel III on the profitability of the South African banking sector UR - http://hdl.handle.net/11427/27387 ER - en_ZA
dc.identifier.urihttp://hdl.handle.net/11427/27387
dc.identifier.vancouvercitationSadien E. The impact of the change from Basel II to Basel III on the profitability of the South African banking sector. [Thesis]. University of Cape Town ,Faculty of Commerce ,Department of Finance and Tax, 2017 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/27387en_ZA
dc.language.isoengen_ZA
dc.publisher.departmentDepartment of Finance and Taxen_ZA
dc.publisher.facultyFaculty of Commerceen_ZA
dc.publisher.institutionUniversity of Cape Town
dc.subject.otherFinancial Managementen_ZA
dc.titleThe impact of the change from Basel II to Basel III on the profitability of the South African banking sectoren_ZA
dc.typeMaster Thesis
dc.type.qualificationlevelMasters
dc.type.qualificationnameMComen_ZA
uct.type.filetypeText
uct.type.filetypeImage
uct.type.publicationResearchen_ZA
uct.type.resourceThesisen_ZA
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