Seetharaman and other officials during the inauguration of Doha Bank’s representative office in Johannesburg.
Doha Bank hopes to attract the support of key South African banks to initially establish Nostro account relationships in Gulf Cooperation Council (GCC) currencies and Indian rupees, as well as affording them trade finance support, risk sharing, and syndication loans, Doha Bank Group CEO Dr R Seetharaman said.
Seetharaman made the statement during the inauguration of Doha Bank’s representative office in Johannesburg, South Africa held on June 25 in the presence of dignitaries and other officials of the bank.
“South Africa aims to attract Foreign Direct Investment (FDI). Infrastructure development is happening in the GCC and the SME sector between both blocs can exchange ideas. Food supply requirements of the GCC can also be enhanced from South Africa.
“Tourism is also an area where both regions can build relationships, and South Africa can participate in FIFA World Cup-related projects. Doha Bank will look forward to opportunities coming from these developments,” Seetharaman said in a speech.
Seetharaman also highlighted on the South African economy and said, “South Africa is expected to grow at 2% this year. Mining is the backbone of the economy and contributes to significant earnings from exports.
“South Africa’s consumer price index climbed to 4.6% year-over-year in May 2015 due to weaker rand-dollar exchange rates, as well as higher oil prices. South Africa’s current account deficit was at 5.4% of GDP in 2014, while its recent budget has forecasted a budget deficit of 3.9% of GDP.”
On South Africa’s banking sector, Seetharaman said there are 40 foreign banks with approved local representative offices in South Africa.
“Banks remained sound and profitable during the crisis with the return on equity staying close to 20%.
The average non-performing loans (NPL) ratio was 3.6% in 2013. Bank credit is funded largely by local deposits, with institutional deposits from insurance companies, pension funds, and other financial institutions,” he explained.
According to Seetharaman, GCC-South Africa bilateral relationship was around $12bn in the last three years.
He added that South Africa’s exports to the GCC amounted to around $2bn, composed of base metals, machinery and mechanical appliances, and vegetable products, while imports from GCC were around $10bn comprising mostly of crude oil, chemicals, and plastics.
