Johannesburg - Confidence in the domestic financial services sector improved marginally in the fourth quarter of 2013, the SA Reserve Bank said in a report on Thursday.
“In particular, confidence among life insurers rebounded despite the difficult underlying operating conditions, including relatively weak economic growth, a depreciating exchange rate and high unemployment,” it said in its March Financial Stability Review (FSR) report.
The report found that consumer confidence remained near “decade lows” in the fourth quarter of last year.
“Growth in households’ financial and total assets continued to moderate in the second half of 2013, and savings by households as a percentage of disposable income declined,” it said.
“Growth in total credit extended to the household sector also moderated. Although debt as a percentage of disposable income dropped... the number of credit-active consumers in good standing decreased.”
It said the Financial Services Board was putting into effect an approach based on the concept of treating customers fairly.
“This approach seeks to ensure that fair treatment of customers is embedded within the culture of regulated entities.
“It should improve customers’ confidence in the sector.”
The report said global economic growth improved in the second half of last year, and further improvements were anticipated in the 2014/15 financial year. This was largely because of a stronger recovery in advanced economies.
In line with other emerging-market economies (EMEs), the South African economy recorded “below par” real economic growth for 2013, which contributed to a downward revision of the bank’s economic growth forecast for 2014.
“South Africa’s unemployment rate dropped marginally in the fourth quarter of 2013 compared to the third quarter,” it said.
“Youth unemployment remains a concern, globally and domestically, despite a slight decrease in the fourth quarter of 2013.”