Banking shares to buy right now
The sheer quantum of the banks’ profits is testament to the huge role they play in the economy
SA’s big banks have similar profitability, and there seems to be a relaxed attitude to competition among them. But this could be the last time the banking sector seems so tame. With Discovery Bank launching before the end of the year and Bank Zero and TymeDigital gearing up, there could be some discomfort when the banks next report in March. As far as earnings are concerned, bank fees are the industry’s soft underbelly. Johan van Zyl, head of Tyme’s major shareholder African Rainbow Capital, points out that SA banks earn 50% of their income from transaction fees, whereas in many other markets it is 10% or less. In the six months to June there was a narrow band of growth, with headline earnings from Absa and Nedbank up 2% (excluding the recovery in Nedbank’s 20% share of Ecobank). To be technically strict, it is accurate to say that Absa’s International Financial Reporting Standards earnings were down 4%, but some complex changes have been introduced, leading to noise. Fund managers’...
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.