Concentration and competition: The changing landscape of the banking sector in South Africa 1970–2007

Abstract

The banking sector in South Africa has been dominated by British-owned banks since the second half of the nineteenth century, both in nature and size. In the Cape Colony privately incorporated banks were only permitted after 1823. By the early 1830s 28 local banks thrived in the agricultural prosperity of the colony. In 1860 The London & South Africa Bank was the first of the Imperial banks to open its doors, followed by Standard Bank in 1862. Four successive bank crises in the Cape Colony in 1865, 1876, 1881 and 1890 practically wiped out the local independent banks, leaving only two British banks, Standard Bank and Bank of Africa, established in 1880 out of remnants of the Oriental Banking Corporation. By 1890 only seven banks remained active in the Cape Colony.