A perspective on the impact of the Deposit Taking Institutions Act on banks in South Africa

Simple item page
dc.contributor.advisorLeiman, Tonyen_ZA
dc.contributor.authorJacobson, Ari Hughen_ZA
dc.date.accessioned2016-08-22T12:23:01Z
dc.date.available2016-08-22T12:23:01Z
dc.date.issued1994en_ZA
dc.description.abstractThe primary objective of this mini-thesis is to show that the new banking legislation, which was implemented in South Africa in February 1991, as the Deposit Taking Institutions Act of 1990 [hereinafter "DTl"], encouraged the trend towards larger financial institutions in South Africa. A further aim of this thesis is to find a variable that best represents a financial institution's performance and to use this measure to determine a relationship, if any, with an individual bank's size. The test is to be conducted utilising a sample of South African banking institutions. The concept of size versus performance has been considered often in myriad studies of financial institutions worldwide. However, it should be noted that studies regarding the performance of the banking industry in South Africa, are virtually non-existent. In Chapter 1, a brief history of world banking trends will be discussed, while in Chapter 2 we will deal with bank developments in South Africa, including an in-depth study of the DTI Act. In Chapter three, we survey banking literature and note particularly the methodologies employed in analysing the relevance of performance indicators, and the criterion used, to demonstrate the effectiveness and efficiency of a financial institution. It is shown that at least fifty studies, between 1990 and 1993 have purported to demonstrate, inter a/ia, the influence of government regulation on banking performance, economies of scale at banks, benefits associated with interbank mergers, as well as the results of bank and non-bank mergers. Contemporary studies of the banking industry have also employed a variety of measurement techniques to evaluate a bank's performance. This has entailed various approaches ranging from fundamental analysis to more sophisticated programming methodologies. Moreover research has attempted to discern the optimal level of efficiency, at an individual financial institution. The underlying objective of this mini-thesis is to reveal whether big banks perform better than small banks in South Africa. Here it is hypothesised that legislation, in the form of the DTI Act, has in fact given rise to bigger banks. Yet there is evidence, [Boyd and Runkle(1993)], that bigger banks are not better performing banks. Following in part from Boyd and Runkle, the performance criterion to be used, herein, is the price earnings (PE) ratio, while size is determined by gross advances. The aim of this enquiry is to look at an individual bank to gauge a relationship, if any, between size and performance. The expectation is that the bigger the bank the higher its PE ratio, because there is clear support for bigger banks in the DTI Act, as will be argued in Chapter 2 & 4.en_ZA
dc.identifier.apacitationJacobson, A. H. (1994). <i>A perspective on the impact of the Deposit Taking Institutions Act on banks in South Africa</i>. (Thesis). University of Cape Town ,Faculty of Commerce ,School of Economics. Retrieved from http://hdl.handle.net/11427/21415en_ZA
dc.identifier.chicagocitationJacobson, Ari Hugh. <i>"A perspective on the impact of the Deposit Taking Institutions Act on banks in South Africa."</i> Thesis., University of Cape Town ,Faculty of Commerce ,School of Economics, 1994. http://hdl.handle.net/11427/21415en_ZA
dc.identifier.citationJacobson, A. 1994. A perspective on the impact of the Deposit Taking Institutions Act on banks in South Africa. University of Cape Town.en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - Jacobson, Ari Hugh AB - The primary objective of this mini-thesis is to show that the new banking legislation, which was implemented in South Africa in February 1991, as the Deposit Taking Institutions Act of 1990 [hereinafter "DTl"], encouraged the trend towards larger financial institutions in South Africa. A further aim of this thesis is to find a variable that best represents a financial institution's performance and to use this measure to determine a relationship, if any, with an individual bank's size. The test is to be conducted utilising a sample of South African banking institutions. The concept of size versus performance has been considered often in myriad studies of financial institutions worldwide. However, it should be noted that studies regarding the performance of the banking industry in South Africa, are virtually non-existent. In Chapter 1, a brief history of world banking trends will be discussed, while in Chapter 2 we will deal with bank developments in South Africa, including an in-depth study of the DTI Act. In Chapter three, we survey banking literature and note particularly the methodologies employed in analysing the relevance of performance indicators, and the criterion used, to demonstrate the effectiveness and efficiency of a financial institution. It is shown that at least fifty studies, between 1990 and 1993 have purported to demonstrate, inter a/ia, the influence of government regulation on banking performance, economies of scale at banks, benefits associated with interbank mergers, as well as the results of bank and non-bank mergers. Contemporary studies of the banking industry have also employed a variety of measurement techniques to evaluate a bank's performance. This has entailed various approaches ranging from fundamental analysis to more sophisticated programming methodologies. Moreover research has attempted to discern the optimal level of efficiency, at an individual financial institution. The underlying objective of this mini-thesis is to reveal whether big banks perform better than small banks in South Africa. Here it is hypothesised that legislation, in the form of the DTI Act, has in fact given rise to bigger banks. Yet there is evidence, [Boyd and Runkle(1993)], that bigger banks are not better performing banks. Following in part from Boyd and Runkle, the performance criterion to be used, herein, is the price earnings (PE) ratio, while size is determined by gross advances. The aim of this enquiry is to look at an individual bank to gauge a relationship, if any, between size and performance. The expectation is that the bigger the bank the higher its PE ratio, because there is clear support for bigger banks in the DTI Act, as will be argued in Chapter 2 & 4. DA - 1994 DB - OpenUCT DP - University of Cape Town LK - https://open.uct.ac.za PB - University of Cape Town PY - 1994 T1 - A perspective on the impact of the Deposit Taking Institutions Act on banks in South Africa TI - A perspective on the impact of the Deposit Taking Institutions Act on banks in South Africa UR - http://hdl.handle.net/11427/21415 ER - en_ZA
dc.identifier.urihttp://hdl.handle.net/11427/21415
dc.identifier.vancouvercitationJacobson AH. A perspective on the impact of the Deposit Taking Institutions Act on banks in South Africa. [Thesis]. University of Cape Town ,Faculty of Commerce ,School of Economics, 1994 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/21415en_ZA
dc.language.isoengen_ZA
dc.publisher.departmentSchool of Economicsen_ZA
dc.publisher.facultyFaculty of Commerceen_ZA
dc.publisher.institutionUniversity of Cape Town
dc.subject.otherEconomicsen_ZA
dc.titleA perspective on the impact of the Deposit Taking Institutions Act on banks in South Africaen_ZA
dc.typeMaster Thesis
dc.type.qualificationlevelMasters
dc.type.qualificationnameMAen_ZA
uct.type.filetypeText
uct.type.filetypeImage
uct.type.publicationResearchen_ZA
uct.type.resourceThesisen_ZA
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
thesis_com_1994_jacobson_ari_hugh.pdf
Size:
1.47 MB
Format:
Adobe Portable Document Format
Description:
Download
Collections
Masters