{"id":164349,"date":"2017-03-14T15:44:38","date_gmt":"2017-03-14T13:44:38","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=164349"},"modified":"2017-03-14T17:28:39","modified_gmt":"2017-03-14T15:28:39","slug":"four-areas-sa-banks-really-need-to-focus-on-in-2017","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/164349\/four-areas-sa-banks-really-need-to-focus-on-in-2017\/","title":{"rendered":"Four areas SA banks really need to focus on in 2017"},"content":{"rendered":"<p>South Africa\u2019s major banking groups produced a credible set of results against various economic headwinds for the year ended December 2016.<\/p>\n<p>Although there are differences in the financial performance of the individual banks, the four major banking groups including Barclays Africa Group, First Rand, Nedbank and Standard Bank, posted combined headline earnings of R72.3 billion, up 8.4% on an annualised basis compared to 2015.<\/p>\n<p>On the back of resilient earnings, combined return on equity (ROE) grew to 18.6% in the second half of 2016.<\/p>\n<p>These are some of the findings from PwC\u2019s South Africa Major Banks Analysis report released on Tuesday (14 March) entitled \u2018Standing firm against headwinds.\u2019<\/p>\n<p>Johannes Grosskopf, financial services leader for PwC Africa, said: \u201cAlthough the operating environment for the major banks remained difficult on the back of macroeconomic uncertainty, the combined results for the current period continue to bear testimony to the strength of the South African banking sector and resilience of our banks\u2019 ability to generate earnings.\u201d<\/p>\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/banking\/161573\/capitec-is-adding-120000-new-customers-each-month\/\" target=\"_blank\">Capitec is adding 120,000 new customers each month<\/a><\/strong><\/p>\n<p>Globally and domestically, the banking industry continues to respond to multiple headwinds, PwC said.<\/p>\n<p>\u201cRapidly developing financial and regulatory technology, competition from non-traditional players, advances in big data, cloud computing, artificial intelligence and ongoing innovation of core banking activities all offer the prospect of significant opportunity.<\/p>\n<p>Within these dynamics, the major banks will find themselves increasingly busy. Key operational priorities include:<\/p>\n<ul>\n<li>The implementation of emerging technology to replace legacy systems;<\/li>\n<li>A sharp focus on cyber and IT resilience;<\/li>\n<li>The digitisation of front and back-office operations;<\/li>\n<li>And ensuring electronic channels keep pace with customer expectations.<\/li>\n<\/ul>\n<p>From a lending perspective, the major banks reported moderate growth in combined gross loans and advances of 0.7% against the first half of 2016 and 2.1% against 2015. Combined credit growth for the major banks remains driven by corporate rather than retail demand.<\/p>\n<p>Total non-performing loans (NPLs) continue to reflect a mixed picture across the individual banks. On a combined basis, total NPLs decreased 2.8% against the first half of 2016 but increased 4.5% against 2015.<\/p>\n<p>Net interest income remains a key revenue driver contributing to the earning growth of the major banks. NIR grew by a robust 12.8% for the 2016 calendar year, while the combined net interest margin grew by 22 basis points to 4.61% from 31 December 2015 to 31 December 2016, PwC said.<\/p>\n<p>Non-interest revenue (NIR) continues to be supported by growth in fee and commission income, which represents 73% of total NIR revenue for the second half of 2016. On an annualised basis, combined NIR grew 5.4% compared to the calendar year 2015.<\/p>\n<p>Cost containment remains an important focus for the banks, while they continue to invest in processes and initiatives to enhance their IT capabilities to respond to customer demand, regulatory requirements and cyber programmes in order to mitigate the threat of cyber risk.<\/p>\n<p>More than 55.5% of the major banks\u2019 total operating expenses at the second half of the year related to staff costs.<\/p>\n<p>Overall, operating expenses grew 9.2% on an annualised basis compared to the 2015 calendar year.<\/p>\n<hr \/>\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/columns\/163657\/is-it-all-over-for-internet-banking-in-south-africa\/\" target=\"_blank\">Is it all over for internet banking in South Africa?<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>South Africa\u2019s major banking groups (Barclays Africa Group Limited, First Rand, Nedbank and Standard Bank) produced a credible set of results against various economic headwinds for the year ended December 2016.<\/p>\n","protected":false},"author":10,"featured_media":120121,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[25,2407],"class_list":["post-164349","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-active","tag-pwc"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/164349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=164349"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/164349\/revisions"}],"predecessor-version":[{"id":164415,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/164349\/revisions\/164415"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/120121"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=164349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=164349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=164349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}