{"id":571042,"date":"2022-03-25T16:01:38","date_gmt":"2022-03-25T14:01:38","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=571042"},"modified":"2022-03-25T16:01:38","modified_gmt":"2022-03-25T14:01:38","slug":"good-news-for-banks-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/571042\/good-news-for-banks-in-south-africa\/","title":{"rendered":"Good news for banks in South Africa"},"content":{"rendered":"<p>A recent analysis of South Africa&#8217;s major banks by financial services firm PwC shows that banks delivered a strong financial performance in the 2021 financial year with a 99% increase in headline earnings against the prior year.<\/p>\n<p>&#8220;With more supportive conditions, the major banks delivered strong results on the back of a rebound in economic activity, increased client engagement levels and gains made through the execution of their digitally-centric strategies,&#8221; said PwC.<\/p>\n<p>The report looked at the performance of Absa, FirstRand, Nedbank and Standard Bank in the 2021 financial year compared to the 2020 financial year.<\/p>\n<p>PwC said that a 59.6% decrease in the combined credit impairment charge was one of the reasons for overall headline earnings to grow 99%.<\/p>\n<p>&#8220;Underlying franchise performance across all areas of activity reflected a combination of strategic initiatives and heightened client engagement,&#8221; said PwC.<\/p>\n<p>Significant markers of positive change across major banks:<\/p>\n<ul>\n<li>Combined return on equity [ROE] of 15.9% [FY20 8.3%]<\/li>\n<li>Net interest margin of 408 bps [FY20 387 bps]<\/li>\n<li>Credit loss ratio of 74 bps [FY20: 180 bps]<\/li>\n<li>Cost-to-income ratio of 55.8% [FY20 56.4%]<\/li>\n<\/ul>\n<p><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2022\/03\/Screenshot-2022-03-24-105713-e1648112269284.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-571076 aligncenter\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2022\/03\/Screenshot-2022-03-24-105713-e1648112269284.jpg\" alt=\"\" width=\"1000\" height=\"472\" \/><\/a><\/p>\n<p>&#8220;While 2021 remained a difficult year for many South Africans, some stakeholders expect that the worst of the pandemic is now in the rear-view mirror.&#8221;<\/p>\n<p>&#8220;Against relatively supportive conditions and deliberate management of risk appetite, the major banks&#8217; results exhibit the strength and stability of the South African banking industry,&#8221; said Costa Natsas, financial services leader for PwC Africa.<\/p>\n<p><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2022\/03\/Screenshot-2022-03-24-102003-edited-e1648111457472.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-571054 aligncenter\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2022\/03\/Screenshot-2022-03-24-102003-edited-e1648111457472.jpg\" alt=\"\" width=\"1000\" height=\"463\" \/><\/a><\/p>\n<p>PwC stressed that their research shows that observable progress has been made in getting economic activity back to pre-pandemic levels.<\/p>\n<p>Many of the major banks shared optimistic outlooks for their short to medium-term expectations in 2022. They expect for pent-up customer demand to serve as the backdrop to supporting credit volumes which together with higher expected interest rates, will support margins and net interest income growth.<\/p>\n<p>According to PwC, the banks are also expecting improved credit conditions to support credit loss ratios.<\/p>\n<p><strong>Key themes of 2022<\/strong><\/p>\n<p>PwC outlines some of its expected overall bank strategy themes to be:<\/p>\n<ul>\n<li>Integrating climate-related risks into lending policies and pricing strategies.<\/li>\n<li>Accelerating the &#8220;trust-building&#8221; activities to focus on addressing new client needs ranging from supply chain issues to facilitating the energy transition in a balanced and responsible manner.<\/li>\n<li>Optimising the business\/service mix to help clients navigate the financial aspects of a energy transition.<\/li>\n<li>Bolstering third-party risk management frameworks and policies as partnerships are further developed.<\/li>\n<\/ul>\n<hr \/>\n<p><strong>Read:\u00a0<\/strong><a href=\"https:\/\/businesstech.co.za\/news\/energy\/571108\/government-to-intervene-on-record-fuel-price-hike-for-south-africa\/\">Government to intervene on record fuel price hike for South Africa<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>PwC&#8217;s latest report details the performance of South Africa&#8217;s major banks as well as what they might change.<\/p>\n","protected":false},"author":10,"featured_media":571080,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[29,26,1799,2407,499],"class_list":["post-571042","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-absa","tag-headline","tag-nedbank","tag-pwc","tag-standard-bank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/571042","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=571042"}],"version-history":[{"count":14,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/571042\/revisions"}],"predecessor-version":[{"id":571602,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/571042\/revisions\/571602"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/571080"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=571042"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=571042"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=571042"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}