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<\/a><\/p>\nAbsa Group Ltd. Chief Executive Officer Daniel Mminele is seeing \u201crisk everywhere\u201d even though its earnings, like Standard Bank\u2019s, have benefited from faster-growing markets on the rest of the continent.<\/p>\n
Many governments still have fiscal and debt challenges to navigate, he said.<\/p>\n
\u2018Too early\u2019<\/strong><\/p>\n \u201cIt is too early to call whether we have got this behind us,\u201d the chief executive of South Africa\u2019s third-largest bank said on a conference call.<\/p>\n To be sure, local banks could benefit from a global recovery triggered by vaccine breakthroughs, stronger commodity prices and a firmer rand, JPMorgan Chase & Co. strategist David Aserkoff said in an interview.<\/p>\n While an interest-rate cut may hurt income, investors are more worried about the likelihood of dividends, \u201cthe cost of risk, non-performing loan issues and the future growth path of the economy,\u201d he said.<\/p>\n The central bank expects South Africa\u2019s economy to shrink 8% this year, and then to rebound to 3.5% and 2.4% in the following two years.<\/p>\n Standard Bank on Monday said full-year earnings will fall more than 20%, echoing an earlier forecast by Nedbank Group Ltd. Absa said its profit could decline more than 40%, while FirstRand Ltd. expects a drop of as much as 25% in the six months through December.<\/p>\n \u201cNone of the updates read that rosy,\u201d Kooyman said. Denker Capital\u2019s base case is that banks may experience improvements from March. \u201cSo you still have these four months in between of risk.\u201d<\/p>\n
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