How much tax SA’s ‘Big 4’ banks paid in 2023
JOHANNESBURG – South Africa’s (SA) ‘Big Four’ banks – Absa, FirstRand, Nedbank and Standard Bank – paid the South African government R37.7 billion in direct taxes in 2023.
This was revealed in PwC’s Major Banks Analysis report for the period ended December 31, 2023, after South Africa’s four largest banks had reported their financial results earlier this month.
PwC’s Major Banks Analysis presents the highlights of the combined local currency results of Absa, FirstRand, Nedbank and Standard Bank, and incorporates key themes from other African banks.
Growth
The financial services firm said the country’s major banks registered strong growth in a difficult operating environment. The combined headline earnings of these four banks rose 13.8 per cent in 2023 to R113.2 billion, despite their average credit loss ratio rising to 102 bps from 82 bps in 2022.
In SA, credit impairments increased on a combined basis to the upper ends of ‘through-the-cycle’ levels due to low growth, consumer pressure and the adverse effects of load-shedding on South African households and businesses. Beyond SA, challenging fiscal positions and sovereign risks intensified in several other African territories where the major banks operate, generating higher sovereign-related risk costs.
However, geographic diversity continued to benefit these banks as higher growth in other parts of Africa offset low growth in SA.
PwC’s banking and capital markets partner, Rivaan Roopnarain, said these results are enviable by global standards and reflect the country’s strong financial sector.
Their revenue benefitted from higher interest rates, balance sheet growth and efficiencies from digitalising their services, said PwC.
The outlook for 2024 is uncertain and complex, with the majority of the global population