'State must buy a bank'

The government should consider buying one of South Africa's commercial banks to boost access to finance for citizens and businesses, said Tito Mboweni, the former Reserve Bank governor.

Mboweni said in an interview this week: "It's a huge amount of money involved, but you must think big, beyond the squatter camp, and then amalgamate that with all these development finance institutions."

President Jacob Zuma has promised radical economic transformation over the next five years to create jobs and spread wealth.

But the government cannot bring significant change without access to capital, Mboweni said.

First Rand is South Africa's biggest banking group by market capitalisation at R244-billion, and Nedbank, the fourth-largest, has a market value of R124-billion.

The lender must be "a deposit-taking institution", said Mboweni, who is a member of the ANC's national executive committee.

"It's a huge intervention and the advantage with acquiring one of the existing banks is that you have the infrastructure."

Postbank, a state company linked to the Post Office that mainly distributes welfare payments, does not have the infrastructure or the "muscle", he said. Mboweni said the country's largest lenders were not doing enough to boost the investment needed.

He cited examples of small, black-owned businesses being denied loans for projects.

"I would imagine the government would have a lot of other priorities to deal with and areas to spend money on," Maria Ramos, CEO of Barclays Africa, said on a conference call yesterday. "Buying one of the large banks wouldn't be top of the priority list and it already owns a couple of banks; it owns Postbank and the Development Bank [of Southern Africa]."

While the Development Bank of Southern Africa and the Industrial Development Corporation are state owned, they do not take deposits.

"A state development bank doesn't mean 100% owned by the state, but it must be majority owned by the state because you want the determination of policy direction to be in line with your goals," Mboweni said.

China has state-owned banks, so it is "not impossible", he said. "You need scale. You need quantum."