ON THE MONEY
STUART THEOBALD: This is why bank profits have shown surprising growth
The improvement as reflected in FNB report is due not to dismal economy, but rather to factors such as rising rates
With the economy blighted by load-shedding, some may be surprised to see banks reporting record profits for 2022. How are they doing it? In short: higher interest rates and lower bad debts. But there are clear reasons why shareholders will be cautious about popping champagne.
FirstRand was the first to report last week, in its case for the second half of last year, showing profits of R18bn, 15% more than 2021’s matching period and much higher than before Covid-19. We will see even bigger records from the other major banks when they report over the next two weeks (Standard Bank has guided the market to expect growth of 30%-35%, Nedbank 24%-29%, Absa 10%-15%)...
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