South Africa - Major Banks Analysis | March 2025

PwC’s Major Banks Analysis presents the combined local currency results of Absa, FirstRand, Nedbank and Standard Bank, and provides reflections from the common strategic themes within other South African banks.  

At 31 December 2024, the South African operations of the major banks included in our analysis comprised 83% of total banking sector assets in South Africa (based on BA 900 industry data). 

Key insights observed from PwC’s analysis include:

• Solid foundations: The major banks’ balance sheets remain anchored by robust capital and liquidity positions, with solid buffers beyond regulatory requirements. Driven by accounting standards and strong risk management, credit provisions kept pace with balance sheet growth, capturing forward-looking information and risk trends in credit portfolios. Credit performance in 2024 showed some signs of improvement, with the combined credit loss ratio declining to 89 basis points for the year, down from 102 basis points in 2023. 
• Digital transformation and cost efficiency: The shift to digital banking platforms accelerated further, particularly in retail banking, with the number of digitally active clients now approaching a third of the South African population by year-end, at just under 21 million. Investments in technology (both new-build systems and legacy systems enhancement), cloud-based solutions and cybersecurity remained priorities, alongside investments in emerging technologies such as open banking and artificial intelligence. The aggregate cost-to-income ratio edged higher to 52.9%, reflecting lagging inflationary pressures within the overall cost base, particularly in the first half of 2024.
• Balance sheet growth and earnings resilience: Steady growth in lending (5.4%) and deposit-taking (8.7%) provided the foundation to support earnings growth in 2024. Supported by larger balance sheets and increased customer numbers, core banking revenues saw good growth, while the major banks’ trading businesses had differing experiences given divergent strategies and financial market volatility. Additionally, improved credit trends, particularly in retail lending portfolios, translated to lower credit impairments and supported overall earnings growth. 
• Centrality of Sub-Saharan Africa to overall bank strategy: While individual approaches to the rest of the continent vary, capturing significant financial services opportunities among young, mobile and digitally savvy African populations in high-growth markets remains a central element of the major banks’ strategies. Banks that operate at scale on the continent saw strong underlying growth and constant currency performance in several West and East African territories, and continue to diversify their businesses, brands and revenue streams in these key markets. However, regulatory challenges, economic constraints and significant currency volatility dampened results in rand terms. Despite these operating challenges, competing purposefully with a pan-African focus remained a critical component of the major banks’ growth strategies. This sentiment is echoed in our 28th Annual Global CEO Survey – Sub-Saharan Africa perspective, which notes that “businesses in Sub-Saharan Africa are undergoing a transformation, driven by demographic changes, technological advancement and the rise of entrepreneurial leadership”.
• Sustainability, emerging technologies and innovation: The major banks made strides in aligning their strategies with sustainability goals, particularly in mobilising funding towards sustainable financing and climate transition initiatives. At the same time, they continue to confidently explore the potential of emerging technologies such as generative AI to enhance operational efficiency, risk management processes and customer experiences across a wide range of use cases. This is consistent with what we have observed globally within the banking industry—those banks that harness the power of AI, data and highly qualified people are the ones that are transforming their operations, elevating customer experiences and exceeding stakeholder expectations. 

Despite 2024 being a turbulent period for global and regional economies, South Africa’s major banks are well-positioned to balance short-term challenges with medium- to long-term growth opportunities. Leveraging their track record of resilience and innovation is likely to guide their value propositions for customers and stakeholders in a highly complex and uncertain operating environment.  

If you would like to further explore the insights from the report, please contact us.