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’...

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