“Retail banking had a significant drop at the beginning of the year. We had strike action and the market was concerned around macroeconomic growth, with rate increases early in the year,” Emilio Pera, financial services sector leader at EY, told Business.
Retail banking confidence improved to 50 (out of 100) in the third quarter of this year, from 46 in the second quarter and 38 in the first. Investment banking confidence on the other hand weakened to 64 from 69 in the second quarter and 73 in the first quarter of the year.
“Investment banking confidence has a direct correlation with the global economic outlook, but given the strong deterioration of the rand and economic outlook of South Africa, that might have had an impact on the confidence level (dropping),” Pera explained.
Given the economic constraints, Pera said banks performed well. “For the Big Four South African banks, revenue was up in double-digit territory, as were profits,” he noted.