South Africa’s big banks saw their profits plunge 65.5% in the first half of this year compared to results they reported at the same time last year, according to a study by professional services firm PricewaterhouseCoopers (PwC).
PwC’s study, Major Banks Analysis, highlighted key themes from the combined local currency results of Absa, FirstRand, Nedbank and Standard Bank.
The PWC research team also found that research suggests that the South African economic output could take between two to seven years to return to 2019 levels.
Costa Natsas, PwC Africa’s financial services leader, said increased credit impairment charges translated into deep contractions in headline earnings and depressed return on equity.
“The major banks’ results for the six months to 30 June 2020 are heavily impacted by the dire human, social and economic costs caused by the COVID-19 pandemic,” Natsas said.
“While the scale and scope of these challenges are unprecedented, operating conditions were already constrained as the year began given a benign domestic economic climate and structural challenges that extended recessionary conditions into first quarter.”
