Industry Research: Financial Institutions

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South African Banks top tier interims reveal the first of the COVID-19 fallout but in-line with rating expectations
  • Industry Research: Financial Institutions
  • Year : Sep 2020
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Summary

Based on the recent interim results, key credit metrics are, so far, broadly in line with GCR’s expectations for the top tier South African banks. GCR projected credit costs to rise to 200bps by the end of 2020, while 70-80% downward stress was applied to forward looking earnings.

Additional Information

Retail and business banking have been the hardest hit business segments so far, with credit costs rising substantially to about 250bps-380bps, from 100bps-130bps a year earlier. On the other hand, Corporate and investment banking credit costs were fairly contained, where credit costs rose to around 90bps-130bps, from a very low 16bps-40bps.

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