The four major banks in South Africa posted combined headline earnings of R27.8 billion, an increase of 13.1 percent in the six months ending June 2014, PwC said on Tuesday.<\/p>\n
“Our banks have performed well,” said PwC head of banking and capital markets for Africa, Johannes Grosskopf.<\/p>\n
“We have a stable set of results and some banks have outperformed others.”<\/p>\n
Grosskopf was addressing the media at the release of PwC’s analysis of the major banks. The company called it “Stability amid uncertainty”.<\/p>\n
He said the financial results of the four major banking groups –Barclays Africa Group, FirstRand, Nedbank, and Standard Bank — had remained positive despite a “challenging and uncertain operating environment”.<\/p>\n
The total operating income of the banks increased by 9.5 percent compared to the first six months of 2013.<\/p>\n
Bad debt expenses were down 9.6 percent while operating expenses were up 9.8 percent.<\/p>\n
Grosskopf said the operating environment for banks remained “difficult and considerably volatile” on the back of macroeconomic uncertainty.<\/p>\n
“It is volatile, uncertain and quite difficult for banks to navigate,” he said.<\/p>\n
The results reflect the strength of the banking sector and the resilience of the banks to generate earnings, he said.<\/p>\n
PwC’s Louwrens van Velden said the 9.5 percent growth in operating income showed quite a strong growth in the sector.<\/p>\n
“People are putting money in the bank and not just spending it,” he said.<\/p>\n
Pricing continued to be “intense” but there had been no fee increases for the same period.<\/p>\n
Grosskopf said the sustainability of the growth rate would be a challenge in future.<\/p>\n
Despite people’s low credit levels they continued to buy.<\/p>\n
“People are still buying cars and spending money at retailers,” said Grosskopf.<\/p>\n
“However, food retailers are being impacted by lower availability of credit. Other retailers have also been impacted by lower availability of credit.”<\/p>\n
He said banks would have to be very “nimble” in the way they priced.<\/p>\n
Investment in IT also remained high on the strategic agenda of banks because other external factors such as cyber crime were developing, he said.<\/p>\n
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