Star 2024-03-19

South African banks’ headline earnings grew 13.8% last year despite difficult operating conditions and a complex macroeconomic environment, PricewaterhouseCoopers (PwC) Southern Africa said in report yesterday. The report, PwC’s Major Banks Analysis, examined the results of Absa, FirstRand, Nedbank and Standard Bank. The report showed combined headline earnings growth of 13.8% against 2022 to R113.2 billion with a combined return on equity of 17.6% – an increase from 17.1% the prior year. Worryingly the credit loss ratio of these banks rose to 102 basis points (bps) from 82 bps. PwC said: “In South Africa, credit impairments increased on a combined basis to the upper ends of ‘through-the-cycle’ levels as credit models reacted to low growth, consumer pressure and the adverse effects of load shedding on South African households and businesses.…

OUTSURANCE Group (OGL), an insurance group operating across South Africa and Australia, plans to open a new business in Ireland in the next three months. “We look forward to a successful market entry of OUTsurance Ireland and are on track to ensure that systems and processes, pricing and customer service are streamlined for a successful business,” CEO Marthinus Visser said yesterday. He said in an online event that there were already 60 people employed in Ireland. Processes were under way to test the systems and establish infrastructure for a direct business to satisfy regulators in that country, such as call centres. The company was following much the same model it had used in setting up its successful Youi Insurance operation in Australia 15 years ago, he said, and significant and…

Government’s investment in large-scale infrastructure is contribution to job creation The government was involved in infrastructure projects in various stages of completion worth R2.4 trillion of which some R570 billion was for transport projects, Public Works and Infrastructure Minister Sihle Zikalala said yesterday. Speaking at the Infrastructure South Africa (ISA) conference in Cape Town, the first time the conference was being held in four years, Zikalala said the government had started 113 “major infrastructure projects” since the last conference in 2020, and these were to build hospitals, roads, dams and other water facilities, and other infrastructure, and some of them were still under construction. He said the government’s investment in large-scale infrastructure was its contribution to job creation and economic growth in the country, and investment in infrastructure was one…

THE South African Reserve Bank (SARB) yesterday continued to remain mum on when it would be holding a media briefing after media reports broke last week that one of its employees had allegedly been overseeing Steinhoff International’s cross border-transactions in 2022. Last week, an article was published in the Daily Maverick, “Steinhoff: Reserve Bank manager signed off on billions in alleged unlawful cross-border transactions (Part One).” Steinhoff International was liquidated last year after an accounting scandal brought it to its knees in 2017, when news broke of the country’s biggest corporate fraud, amounting to €6.5 billion (R134bn), which was explained as an accounting error. The fraud also cost the Public Investment Corporation close to R21 billion of investments. Yesterday, the SARB said: “All matters related to corruption or of a…

THE Johannesburg Stock Exchange (JSE), which is migrating to Amazon World Service (AWS), is to spend between R145 million and R165m in capital expenditure this year, after raising operating income for the 2023 full year by 6.9% to R2.9 billion in a South African market dogged by lower liquidity in equities markets. The JSE was planning a minimum capex of R145m to fund its information services growth strategy, it said yesterday. The capital spend would include “rejuvenation of infrastructure, regulatory enhancements and automation of key” processes. It would focus on “a pragmatic and systematic approach to modernisation by converting to modern software technology” by moving from mainframe to cloud computing and hosting, after “partnering with AWS” in an effort to “facilitate and de-risk” migration processes. In 2023, the JSE…

Analysts say the hotel, resort and casino sectors are raking in profits for hoteliers and related operators, after Sun International raised earnings for the full year to December by 88%, though there are concerns that the growth of the industry is mainly concentrated in the Western Cape. Sun International raised revenues for the 2023 full-year period 70% to R12.1 billion with SunBet income and profitability robust, while Sun City had record adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) of R455 million. The group’s South Africa operations generated R3.6bn. This resulted in headline earnings per share for Sun International for the full-year period under review surging by 88.1% to 425 cents, helping it declare a final dividend of 203 cents per share. The group’s adjusted Ebitda margin was impacted…