Not much to get ex­cited about

Finweek English Edition - - MARKET PLACE - Ed­i­to­rial@fin­

The re­sults for Ned­bank and Stan­dard Bank both showed slightly im­proved im­pair­ment lev­els, sug­gest­ing not so much im­proved fi­nan­cial health of cus­tomers but rather cau­tious lend­ing from the banks. Both also had dis­as­ter ar­eas: Ecobank Transna­tional In­cor­po­rated (ETI) for Ned­bank and Lib­erty for Stan­dard. But what stands out for me is their cost-to-in­come ra­tios sit­ting at 56.9% and 57% re­spec­tively. Both banks want this in the low 50s, but that’s a long way off and is go­ing to be very hard to achieve and will take years. If they can do it, prof­its will boom, but for now legacy banks, while prof­itable, do not ex­cite me.

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