South Africa’s largest banks had a stellar 2025 financial year, reporting combined headline earnings of more than R135bn, with those lenders with geographically diversified earnings reporting superior results.
Most African countries, particularly in East and West Africa, are growing at a faster rate than South Africa, presenting big opportunities to South African lenders, endowed with deep balance sheets.
The sector’s performance was also aided by lower interest rates, which saw improving impairments accompanied by increased corporate borrowing.
Four of the country’s largest banking groups — FirstRand, Standard Bank, Absa and Nedbank, which control about 83% of the industry’s assets — have reported their results in the past two weeks.
Nedbank was the first out of the starting blocks last week, reporting a 2% increase in profit for the year ended December to R17.2bn, while return on equity declined from 15.8% to 15.4%.
The Jason Quinn-led lender also reported a growth in customer numbers that saw the group breach 8-million for the first time in its 138-year history.
The group has moved to diversify its earnings from South Africa, which accounts for more than 80% of its earnings, with the mooted purchase of a controlling stake in Kenyan bank NCBA for R13.9bn.
FirstRand, the country’s most valuable banking group by market value, last week reported strong interim results, which saw its earnings for the six months to end December increase 11% to R23.2bn
FirstRand’s broader Africa portfolio ― which includes Nigeria, Ghana, Mozambique, Zambia and Botswana ― normalised earnings of R2.6bn in the period under review and a return on equity of 20.4%.
Absa on Wednesday reported that headline earnings grew 12% to R24.8bn in the year to December, of which 69% came from South Africa and the rest from the broader Africa portfolio. The group’s return on equity improved from 14.8% to 15%.
The group’s total assets rose 8% to R2.2-trillion. At the heart of Absa’s new strategy is weaning itself off dependence on South Africa, Kenya and Ghana for earnings and growing its Africa regions faster.
Standard Bank on Thursday reported an 11% increase in earnings to R49.2bn in the year ended in December, with nearly R20bn of this coming from the rest of Africa portfolio, which stretches across 20 countries, excluding South Africa.
The group’s assets rose 11% to R3.6-trillion cementing its place as the continent’s largest bank by assets.
In February, Capitec advised investors its profit for the year to end-February might increase by up to 25% from the record R13.7bn headline earnings it reported in the previous year.
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