New banks threaten big four profit
The big four will battle for profit as newcomers start to threaten their market share
The curtain is about to be raised on the next round of financial results, which starts with Liberty Holdings today and carries on for six weeks. The backdrop will not be favourable: credit demand is growing at just 4% this year yet bank shares soared after the Ramaphosa victory. Managers including Allan Gray then took profits.
But now, after a correction, it has rebuilt its position in Standard Bank, a core long-term holding, and has a smaller position in Absa. "Absa is undoubtedly cheap on a multiple of nine and a dividend yield of 6%. But it has underperformed for some years," says Allan Gray portfolio manager Duncan Artus. "We don’t get much confidence from its constant management changes. But it was given a big cheque in the divorce settlement from Barclays, so we have held on to a modest holding." Absa is already moving back into more active credit sales, which were constrained by the Barclays rule book. Ironically, the man in charge of turning on the taps is the new head...
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.