ON THE MONEY
STUART THEOBALD: New accounting rules make comparing banks’ performance with 2009 hard
Companies must now expense the losses they expect to make as soon as their expectations change
Bank profitability has predictably been hit hard by the Covid-19 crisis. Profits have slumped between 43% (Standard Bank) and 82% (Absa) in the first half of the year.
The issue is how to judge this in context. Sure, profits have slumped, but the banks remained profitable and their financial strength has not been compromised. Nevertheless, I do wonder if this has been the worst performance in modern financial history.