| Years Bank Total Asset |
| 2018 STANBIC 6,205,018 |
|
2019. STANBIC. 9,295,682 |
| 2020. STANBIC 12,742,132 |
|
2018. BARCLAYS 8,994,562 2019. ABSA 11,772,546 2020. ABSA. 12,546,473
Calculate the Herfindahl-Hirschman Index (HHI) for each year using total assets and comment on the level of competition |
HHI tells us about the concentration of the market. It is calculated with the formula below:
HHI for the year = sum of all firm's market share (in %) squared.
The HHI is analyzed as below:
HHI < 1500 - competitive marketplace
2500>HHI>1500 - moderately concentrated
HHI>2500 - highly concentrated
To determine HHI we need to calculate the market share of each bank. This is calculated with the formula below:
Market share of a bank = Assets of that bank in that year/Total assets of all banks in that year.
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