International

Goldman Gets Green Light To Operate Bank In South Africa

Goldman Joins South Africa’s Stock Exchange

As Goldman Sachs seeks further expansion in the South African economy, the financial services company joined the Johannesburg Stock Exchange’s interest-rate and currency-derivatives market, Bloomberg reported on Monday (Jan. 20).

South African regulators also approved Goldman Sachs for a bank operation license as the firm strives for growth in the most liquid and sophisticated economy on the continent. It will open a Johannesburg branch of Goldman Sachs International Bank, which is headquartered in London.

Goldman’s expanded move into South Africa coincides with the scaling down of other brokerages, including Macquarie Group, Arqaam Capital, Deutsche Bank and Credit Suisse Group. Despite the economic decline in the country, South Africa has the most promising capital markets on the continent, which boasts a half-dozen of the world’s quickest growing economies.

The Wall Street banker has had a presence in South African for over 20 years. Last month, it named Jonathan Penkin as head of the local business.

The South African economy was running just below $400 billion gross domestic product (GDP), making it attractive to Goldman Sachs. Africa represents about 2 percent of the world’s GDP and 15 percent of the world’s population.

Africa’s working-age population is anticipated to go up to nearly one billion by 2030, up from 705 million in 2018, according to the African Development Bank. To avert unemployment, the continent has to generate about 12 million new jobs annually.

Africa’s eCommerce volume is expected to reach $75 billion by 2025, and economic output in FinTech is anticipated to add $150 billion by 2022 to its GDP.

Earlier this month, Goldman Sachs announced that it was revamping its reporting into new divisions. In a Securities and Exchange Commission (SEC) filing, the Wall Street banker said it had created a consumer and wealth management unit that will include Marcus and the Apple credit card.

The filings also indicated that interest income would be spread across operating segments. In addition, equity investments would be tied to a newly renamed asset management unit.

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