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<\/a><\/p>\nAfrica\u2019s most-industrialized nation was trapped in its longest downward cycle since World War II even before the coronavirus struck.<\/p>\n
A 30.1% unemployment rate, and little progress in reversing the malaise that threatens to push the economy to its deepest contraction in almost nine decades, is making it harder for consumers and businesses to repay loans and transact.<\/p>\n
The South African Reserve Bank in March eased capital rules for lenders to free up their balance sheets so they can better help customers with extra loans or by rescheduling existing credit.<\/p>\n By the end of June, they had provided about R31 billion ($1.8 billion) in coronavirus-related relief, according to the Banking Association South Africa. Even if conditions deteriorate further, lenders are well armed to cope, with much more high-quality liquid assets to cover outflows than the regulator requires.<\/p>\n Standard Bank Group Ltd, the continent\u2019s biggest lender by assets, has guided toward a 30% to 50% first-half profit slump when it releases results on Aug. 20. Absa Group Ltd, which is scheduled to report on Aug. 24, expects earnings to decline as much as 85%.<\/p>\n FirstRand Ltd said earnings excluding accounting adjustment probably fell as much as much as 45% in the 12 months through June.<\/p>\n Nedbank Group Ltd hasn\u2019t yet been more specific since saying on May 22 that its first-half profit will be more than 20% lower, while Capitec Bank Holdings Ltd expects its earnings to decline at least 70% for the six months through August.<\/p>\n Investors are likely to care less about what\u2019s happened and will be more focused on trying to understand how well banks are positioned to recover, said Jan Meintjes, a portfolio manager at Denker Capital in Cape Town. Any positive outlook for 2021 or 2022 will help to boost share prices, he said.<\/p>\n<\/a><\/p>\n<\/a><\/p>\n