Customers queue to draw money from an ATM outside a branch of First National Bank and Nedbank at a mall in Midrand outside Johannesburg. Picture: REUTERS/SIPHIWE SIBEKO
Half-year profits at Standard Bank, Africa’s largest bank by assets, plunged to their lowest in eight years while FirstRand’s full-year headline earnings per share — the main profit measure in SA — fell to a seven-year low.FirstRand CEO Alan Pullinger told Reuters that earnings would be likely to be restored some time between 2023 and end-2024, though any estimates were subject to huge uncertainty.
“Earnings restoration is probably three to four years out if we use the global financial crisis as a benchmark,” said the CEO of one of the other major lenders, who did not want to be named due to uncertainty around the health and economic outlooks.Other banks declined to give estimates. None of the lenders, whose share prices have plummeted on worries over their prospects, have publicly provided guidance on when earnings will recover to 2019 levels.
The most serious long-term drag they face now is the ailing economy, already in recession when the crisis hit, and which recorded its largest contraction ever in the second quarter.