Goldman Sachs has received the nod from the Reserve Bank to run a bank in SA in a move that contrasts with recent downsizing and departures by many of its competitors in the country.
The group has also been admitted as a member of the JSE interest rate and currency derivatives market and will offer foreign exchange and bond trading to corporate and institutional clients.
Jonathan Penkin, CEO of Goldman Sachs SA, said in a statement on Monday the approval from the Bank was “an important milestone as we expand our client offering in South Africa. We are excited to deliver a wider range of services to local and global clients as they continue to build their businesses and invest in the region.”
Cas Coovadia, CEO of the Banking Association SA, said this was an encouraging development for the industry.
“It is positive in that GS [Goldman Sachs] sees long-term potential for a financial and advisory business in SA and we welcome this confidence. However, the fundamental structural issues we have been demanding that government implements are still valid and urgent.”
In May 2019, Goldman Sachs announced a strategic co-operation agreement with Investec for equity trading in SA, enabling both firms to extend their equity trading capabilities and deepen links with African and international institutional clients seeking to invest in the region, it said in a statement.
At the time, Colin Coleman, then head of the sub-Saharan Africa division, said the move was “a testament to our confidence in the unfolding structural reforms in SA, which should drive higher economic growth rates and economic opportunity for our clients and the people of the region”.
Coleman added that “the long-term economic potential of SA is unquestionable”.
The opening comes less than a year after Deutsche Bank, in the midst of a global restructuring, said it would terminate its advisory, corporate-broking and sponsor services in SA, leading to as many as 50 job cuts.
In December, Dubai-based investment bank Arqaam Capital closed its SA office.
In November, Reuters reported that Swiss bank Credit Suisse had pulled out of SA after more than a decade.
Macquarie decided to exit its cash equities in SA in November, but added that it was not leaving and would remain on as an advisory business. With Warren Thompson
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