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Posted by on September 4, 2020

There are five South African banks in the annual ranking made by The Banker, the world’s 1,000 bigger banks ranked or measured by their level of Tier 1 capital

There were seven South African banks in the annual ranking made by The Banker in 2019, because Capitec and African bank frop from the ranking this year

Most of the South African banks still managed to grow their tier 1 capital in 2020, but we should remember that South Africa entered in a recession in the 4th quarter of 2019, and it is the second recession in the last two years

These are the biggest banks in South Africa (here the link) and their Tier 1 Capital $m increase or decrease from 2019 to 2020:

Standard Bank Group (rank 152) > +8,2% from 9.752 (2019) to 10.547 (2020)

FirstRand Ltd (rank 169) > +11,3% from 8.231 (2019) to 9.163 (2020)

Absa Group Ltd  (rank 190) > +13,5% from 6.848 (2019) to 7.773 (2020)

Nedbank Group Ltd (rank 232 ) > +11,8% from 5,109 (2019) to 5.713 (2020)

Investec Ltd (rank 463) > +22,6% from 2.801 (2019) to 2.167 (2020)

So most of the South African top banks have increased their Tier 1 Capital more than 10%, except Investec wich has experienced a great setback

Standard bank is still the biggest bank of the country, but its position fell to 152 from 149 in the 2019 ranking. And it is followed by its main competitor, FirstRand, wich is closing the gap with the biggest bank in South Africa. The 3rd, 4th and 5th places have no changes, Absa, Nedbank and Investec, respectively, maintain their rankings

We can also check their Credit Ratings:

Standard Bank Group: Moody’s > Baa3, Fitch > BB+ , Standard & Poor’s > NA & Outlook > Negative

FirstRand Ltd: Moody’s > Baa3, Fitch > NA, Standard & Poor’s > BB & Outlook > Negative

Absa Group Ltd: Moody’s > Baa3, Fitch > BB+, Standard & Poor’s > NA & Outlook > Negative

Nedbank Group Ltd: Moody’s > Baa3, Fitch > NA, Standard & Poor’s > BB & Outlook > Stable

Investec Ltd: Moody’s > Baa3, Fitch > BB+, Standard & Poor’s > BB & Outlook > Negative

Where Nedbank Group Ltd is the only bank with an stable outlook

Anyway, the outlook for 2020 remains bleak, it said

“Coronavirus containment measures (are) set to compound structural weakness in the economy. The International Monetary Fund forecasts gross domestic product will contract by 5.8% in 2020, before rebounding by 4% the following year.”

But this situation is common for all countries in the world, so South African banks should not be more affected than the rest of the world’s banks

Posted in: Business, Services

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