Covid-19 forces SA bank earnings to fall sharply in 2020-PwC

THE COMBINED headline earnings of South Africa’s major banks fell by 48.4 percent to R43.6bn in the 2020 financial year, says PwC.

THE NEED among the big banks to be agile and “speedy to market” through the Covid-19 crisis would not be a temporary phenomenon, PwC said on Friday in its Major Banks Analysis.

The combined headline earnings of South Africa’s major banks fell by a substantial 48.4 percent to R43.6 billion in the 2020 financial year due in main to the weak economy and considerable uncertainty following the pandemic.

“Our economics team expects the global economy to expand 4.7 percent in 2021, a forecast conditional on successful deployment of Covid-19 vaccines and accommodative fiscal, financial and monetary conditions,” the professional services and accounting firm said.

Some of the banks had cautiously indicated that they were hopeful to have seen the bottom from an earnings perspective, and early indicators from the first three months of 2021 showed “a sliver of positivity”, with increased client activity, retail credit collections and early-stage debt relief showing a few promising trends, PwC said.