Boitumelo Kose, Milan De Wet
Abstract
This paper examines the impact of the 2008 global financial crisis (GFC) and Covid-19 comparatively on the banking sector in South Africa. Using a sample of five banks and the JSE SA Banks index, this paper adopts a panel regression and event study approach for the periods 2015 to 2022 and 2006 to 2013 for analysis of Covid-19 and the GFC respectively. For the event study, two key events are focused on, 26 March 2020 and 15 September 2008. The first event is the announcement of the first nationwide lockdown level 5 in South Africa, which resulted from Covid-19 cases increasing at a rapid rate. The second event is when the Lehman Brothers Holdings Inc. declared bankruptcy, which caused shock to the global financial market.
The regression results and event study results imply that the effects of Covid-19 and the GFC on bank performance were not significant. Therefore, in the long run, banks in South Africa will continue to weather crises such as Covid-19 and the GFC.