A fundamental evaluation of the top five South African banks after the financial crisis | Zendy

Chris van Heerden | Zendy; André Heymans | Zendy

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A fundamental evaluation of the top five South African banks after the financial crisis

Author(s) -

Chris van Heerden,

André Heymans

Publication year - 2013

Publication title -

journal of economic and financial sciences

Language(s) - English

Resource type - Journals

eISSN - 2312-2803

pISSN - 1995-7076

DOI - 10.4102/jef.v6i3.256

Subject(s) - investment (military) , data envelopment analysis , financial crisis , market liquidity , investment banking , business , finance , economics , set (abstract data type) , financial system , financial economics , macroeconomics , mathematical optimization , mathematics , politics , political science , computer science , law , programming language

A significant correlation exists between financial crises and bank liquidity problems, thus exposing the investor to increased risk where the banking industry forms part of their investment portfolios. Also, due to more volatile markets and more complex financing banking activities, the general notion of evaluating only share price trends to determine future investment prospects can become misleading. This paper, therefore, focuses on a multi-stage Data Envelopment Analysis (DEA) model as a complementary share performance tool to the traditional set of fundamental factors. When combining the results from the DEA model and a set of traditional financial measures, Nedbank and FirstRand were found to be the more sensible investment choices for the period under investigation.

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