Skip to content Skip to footer

Loading Results

South Africa - Major Banks Analysis

Strength and stability

PwC’s analysis of major banks’ results for the reporting period ended 31 December 2021.


PwC’s South Africa - Major Banks Analysis presents the highlights of the combined local currency results of Absa, FirstRand, Nedbank and Standard Bank, and incorporates common strategic themes from the other South African banks. The analysis also identifies common trends shaping the banking industry across all major players and builds on previous PwC analyses for a period of over a decade.

Download the latest South Africa - Major Banks Analysis here


Women reading the new PwC's SA Major banks analysis

Key themes arising from the reporting period

  • Supportive economic conditions and an improved credit cycle provided the basis for an unwind in risk provisions across loan portfolios. Credit impairment charges decreased 59.6% year-on-year, underpinning an acceleration in headline earnings to the region of pre-pandemic levels. However, some risk provisions remain to cater for macro risks and the still uncertain path of the pandemic.
  • While the major banks results for the period largely reflect positive credit performance, underlying franchise momentum and heightened client transactional activity combined to result in resilient pre-provision operating profit growth of 6.2% year-on-year. Interestingly, revenue pools from the delivery of broader financial services - including from insurance activities and asset and investment management - represent a growing contribution to non-interest revenue.
  • Deliberate risk appetite management and disciplined approaches to credit origination remained observable, while the low-interest rate environment, pent-up consumer demand and favourable buy-side property market dynamics supported credit growth.
  • Credit quality has improved, evidenced by the decrease in the stock of non-performing loans. This reflects a combination of collections efforts, client repayments and credit migration into lower risk bands.
  • Continued focus on, and investments into, further building out digital banking capabilities resulted in positive client satisfaction scores and experience sentiment. While these efforts made for a more competitive banking environment, they also translated into client acquisition gains in some cases and a higher proportion of digitally-active clients, which grew 8% against FY20 (and 22% against FY19).
  • Key metrics across capital, liquidity and provisioning were consistently maintained and further bolstered in FY21, reflecting the stability and resilience of the major banks’ balance sheets. The combined common equity tier 1 capital ratio, a core measure of capital strength, strengthened to 13.4% (FY20: 12.3%), surpassing pre-pandemic levels. These robust balance sheet positions provided the foundation for the major banks to continue to support clients and execute on their strategies. 
  • Tight cost control continued, with expense growth managed below CPI growth for the period. As the major banks double-down on embedding their digitally-led strategies, we expect that the next wave of cost reduction will mostly come from productivity improvement, digitisation and reshaping enterprise priorities as opposed to more traditional measures such as reducing discretionary expenditure or optimising headcount.
  • Changes in the scope and delivery of financial services is unrelenting, particularly across the African continent. Africa remains the world’s largest adopter of mobile money transfer systems, accounting for approximately 70% of global mobile money transactions and two-thirds of the world’s mobile money transaction volume by value (according to research by The Brookings Institute). The major banks’ foreign operations in the rest of Africa contributed 17% (FY20: 21%) to total headline earnings, dampened by stronger relative performances from South African operations and Rand currency strength.
  • Data is now clearly seen as a strategic asset, informing product innovation, the scaling of new businesses and investments in a new range of skills - from data scientists to engineers. 
  • Accelerating cloud adoption and use of emerging technologies. The acceleration of strategic partnerships between some of the major banks and established and emerging technology players highlights extensive efforts to access and deploy cloud and other new technologies in order to gain competitive advantages. The major banks understand that implementing cloud-based solutions, AI, algorithms and other changes is foundational in an era of expansive digital change and customer expectations.
  • Responding to evolving social and regulatory expectations to climate risk and ESG-related topics is a high priority. As financial intermediaries and risk managers, banks will play a key role in facilitating an orderly energy transition as economies, markets and companies adapt to evolving climate policy. At the same time, they will seek to service the wide-ranging ESG needs of clients and the growing investor appetite for ESG products, evidenced by several ‘green-bond’ issuances that the major banks undertook in FY21.


Contact us

Costa  Natsas

Costa Natsas

Partner, Financial Services Industry Leader, PwC South Africa

Tel: +27 (0) 11 797 4105

Francois Prinsloo

Francois Prinsloo

Banking and Capital Markets Industry Leader, PwC South Africa

Tel: +27 (0) 11 797 4419

Rivaan Roopnarain

Rivaan Roopnarain

Banking and Capital Markets Partner, PwC South Africa

Tel: +27 (0) 11 287 0915

Follow us