Goldman Sachs has received approval from South African regulators to operate a bank in the country. The investment bank’s new licence to operate in South Africa is part of its expansion strategy.
Goldman Sachs became a member of the Johannesburg Stock Exchange’s interest-rate and currency-derivatives market, Bloomberg reported. Goldman Sachs will offer fixed income products, foreign exchange and South African government securities to both corporate and institutional investors.
With the new licence, a Johannesburg branch of Goldman Sachs International Bank will be set up and headquartered in London, media reports said.
Last December, Goldman Sachs appointed Jonathan Penkin to head the local business. Previously, he served as the co-head of financing group for Asia-Pacific, excluding Japan. Willem Baars and Olivier Frendo will co-head Goldman Sachs investment banking for Sub-Saharan Africa, alongside Penkin.
The bank’s expansion strategy comes as brokerages including Macquarie Group, Arqaam Capital, Deutsche Bank and Credit Suisse close down or scale back a part of their operations as a result of South Africa’s declining economy, the media reports said.
It’s decision to further expand into South Africa was after the elections last week, where President Cyril Ramaphosa pledged to uplift the economy and stop corruption. Goldman Sachs has had a presence in the country for 20 years now.
The lender will be partnering with Investec on equity trading in the country. Investec is an international specialist banking and asset management group based in South Africa. Currently, Goldman Sachs offers advisory, wealth management and asset management services to corporations, government institutions and individuals in the country,