Despite tough economic times, South Africa’s top four banks – all of whom with a presence in the African continent – posted impressive increases in headline earnings in the six months to June, according to a PwC report released on Wednesday.
The PwC report states that total headline earnings of Absa, Standard Bank, FirstRand and Nedbank surged 11.5 percent during the interim period to June this year.
Johannes Grosskopf, the banking analyst at PwC, said the 11.5 percent represented the total headline earnings amounting to R23.7 billion ($2.4 billion) for all the four banks.
BDLive quoted Grosskopf as saying the local banks’ return-on-equity (ROE) was in the same level, if not slightly above par, with those banks in the Brics emerging markets.
Brics emerging markets include Brazil, Russia, India, China and South Africa.
However, local banks have an important issue they have to tackle urgently and that includes the authorities’ regulatory restructuring.
South Africa’s top four banks expect that their African operations to generate good revenues in the short term.
Barclays recently increased its 55.5 percent stake in Absa to 62.3 percent to launch a new company, known as Barclays Africa.
Barclays Africa has over 1,300 branch network and 10,400 ATMs throughout 10 African states.
Standard Bank is Africa’s biggest bank by assets with operations in 18 African countries.
FirstRand has put aside R10 billion ($1.02 billion) over the next two years to increase its presence in Africa by making acquisitions and start greenfields businesses.
The bank recently tried to acquire a couple of banks in Nigeria but these plans collapsed because of price.
However, the bank is still looking for opportunities in Africa’s biggest market in terms of population numbers.
Nedbank’s alliance with Ecobank has worked well in the past four years. The companies have struck deals together, beating rivals in the process. Ecobank has its head-office ion Togo.
The Ecobank Nedbank alliance has the biggest banks network in Africa with over 1,500 branches in 35 countries.
