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In theory, banks should be doing well in this environment.

Inflation leads to larger balance sheets, which means more demand for debt. Higher interest rates mean a larger net interest margin, so there’s a pricing benefit on top of the demand benefit. Noninterest revenue is typically driven by volatility in markets, something that we’ve seen no shortage of. And unlike global peers, South African banks earn most of their money from traditional banking and ancillary services, rather than swashbuckling M&A and advisory fees that rise and fall with the equity markets. That’s just as well, considering the JSE isn’t exactly a hotbed of corporate activity in terms of listings and capital raisings...

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