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Major banks analysis

Reflecting resilience.

PwC’s analysis of major banks’ results for the reporting period ended 30 June 2021.


PwC’s 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 major banks, including including Investec and Capitec. 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.

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Key themes arising from the reporting period

  • After a considerable build in provisioning in FY20 and aided by a recovery in credit conditions in the first half of 2021, headline earnings benefited from sharply lower credit impairment charges across most lending portfolios and customer segments.
  • Record commodity prices supported South African corporate earnings across several key industries and, in turn, loan performance within wholesale credit portfolios. 
  • Regionally, commodity-led economies also benefited from favourable prices, which aided the performance of the major banks’ subsidiaries in these territories. These gains were partially offset by volatility in exchange rates caused by a stronger rand and operations in tourism-led economies, where significant economic challenges persist.


  • Costs remained tightly managed below CPI growth for the period, benefiting from a stable inflation environment and lower travel and entertainment costs. Some of the major banks implemented property optimisation strategies as they rethink corporate and branch real estate resulting in savings on property costs. Overall, expenses increased moderately due to staff cost increases, bonuses and amortisation/depreciation charges on the back of continued technology investments, including digital offerings.
  • Robust growth in banking revenues supported pre-provision operating profit, driven by a combination of heightened client activity, digital transaction volumes and credit demand, albeit off a low base comparatively. Revenue growth was offset by tighter interest margins and negative endowment effects given the low interest rate environment and challenging bancassurance earnings due to heightened mortality and retrenchment claims and higher reserving requirements. 


  • A client-focused digital banking strategy is now expected as a minimum. But what does it mean? The central challenge for banking in an increasingly competitive environment is increasing relevance to customers. While investments in IT architecture, digital platforms, data and automation continued, the major banks highlighted ambitions to capture learnings from the COVID-19 crisis and transform how they deliver products and services. Various operating models have begun to emerge — ranging from providing end-to-end services alongside underlying financial transactions to creating ecosystems by connecting customers with partners, fintechs and other providers through open architecture, and outsourcing some aspects of the delivery model to strategic delivery partners.
  • Board, investor, customer and regulator perceptions of value and risk are changing, with environmental, social and governance (ESG) issues rising rapidly on the agenda. Thinking is moving beyond reporting of climate-related disclosures and ESG policies. The need for a convincing ESG strategy and appropriate performance measurement indicators is now front of mind. While these topics cross industries, the major banks are astutely aware of the shifting dynamics and importance of these areas. 


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