The JSE’s R1.12-trillion banking index has lost 11.5% of its value since the end of March, putting it on track for its worst quarterly performance in two-and-a-half years. Rand depreciation and a local bond sell-off due to tightening global monetary policy are the primary culprits, but the sector has also suffered because of disappointing local econ- omic fundamentals. The sector, however, looks set to benefit from an expected improved economic climate in the second half of the year. Judging from the pre-closing calls from some banks, year-to-date performance from their local franchises had remained somewhat constrained, said Momentum Securities banking analyst Brian Mugabe. The same factors that were apparent in the 2017 financial year, such as low corporate credit demand given uncertainty around the economy, and now to a lesser extent political outlook, continued to weigh. The rand has depreciated 14% against the US dollar since the beginning of March, while at the same time the J...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.