Industry Research: Financial Institutions

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South African Banking sector under pressure, with key credit quality indicators expected to follow a negative trend through 2020.
  • Industry Research: Financial Institutions
  • Year : Jun 2020
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Summary

The onset of the Covid-19 pandemic has compounded an already strained operating environment and will have a negative impact on asset quality for the banking sector.Unprecedented interest rate cuts by the reserve bank, together with higher credit losses and lower transaction volumes, will weaken profitability and potentially moderate strong capital buffers.

Additional Information

While the banking sector remained resilient amidst ever increasing economic challenges, exposure to highly impacted sectors has seen a deterioration in asset quality, albeit strong capital and liquidity management, coupled with good profitability meant that banks were well placed to absorb these risks.

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