South Africa’s largest banks exhibit growth and resilience in first half of 2025

The first half of 2025 was a period of strategic navigation for South Africa’s major banks. Operating against a backdrop of persistent geopolitical tensions, major trade uncertainties and gradual shifts in monetary policy, the nation’s largest banks managed to grow their earnings with double digits. That is according to research from PwC.

In H1 2025, the combined headline earnings of major banks in South Africa reached R69.7 billion, up 11.2% versus H1 24 to significantly outpace the rates of economic growth in South Africa and sub-Saharan Africa. Underpinning earnings growth was the combination of solid top-line growth across net interest income (up 4.8% against H1 2024) and non-interest revenue (up 10.5% against H1 2024), supported by a nearly 2% decline in bad debt charges.

Reflecting moderately improved consumer and business sentiment in the first half of 2025, new loan disbursements supported aggregate gross loans and grew by 6.4% compared to the same period the year previous. Individual loan portfolios and industry sectors showed differentiated growth rates between the major banks, based on a combination of differing strategies, geographic profiles and risk appetites.

On a combined basis, the major banks saw their return on equity (ROE) increase by 40 basis points to 19.5% (in H1 2024: 19.1%). This outcome remains reflective of positive economic leverage as the combined ROE remains above the major banks’ average cost of equity. The combined common equity tier 1 capital ratio expanded to 18.3%, up from 17.7%.

The combined credit loss ratio (the income statement impairment charge divided by average advances) moderated to 220 basis points, down from 236 basis points in H1 2024, as the bad debt charge decreased by 1.8%. While the credit loss ratio of most of the major banks benefitted from product and geographic diversity, retail unsecured lending portfolios exhibited features of higher risk costs in this period.

Reflections from leaders

Commenting on the results of major banks for the period, PwC partner Rivaan Roopnarain said: “The defining narrative accompanying the major banks results for the first half of 2025 is one of disciplined strength. While operating conditions remained complex, characterised by low domestic growth and amplified by shifts in the geopolitical landscape and global trade uncertainties, the major banks’ management teams navigated the period honing their strengths, enhancing customer experiences and capitalising on opportunities to further extract efficiencies.”

Costa Natsas, PwC Africa’s Financial Services Leader, added: “South Africa’s major banks continue to prove that they are amongst the most dynamic organisations globally. Their results reported in the first half of 2025 reflect the careful orchestration of their strategies and responses to rapidly shifting economic, technological and customer trends.”

Francois Prinsloo, PwC Africa’s Banking and Capital Markets Leader, noted: “The major banks continue to demonstrate agility in operating in complex conditions. The migration of nearly 21 million clients to digital platforms is now the central fact of retail banking in South Africa and the rest of the continent. In response, the major banks continue to evolve to market and customer trends by crafting personalised customer experiences that anticipate needs and erase friction.”

The outlook

Looking ahead for the rest of 2025, PwC’s researchers say that the global environment is expected to remain volatile and complex to anticipate, with divergent growth prospects between territories. The impact of trade tariffs, volatile commodity prices and varying inflation trends are all expected to complicate monetary policy decisions and rate forecasting, while potentially constraining business sentiment.

Domestically, the economic outlook hinges on the steady implementation of structural reforms. Easing inflation is expected to allow for modest interest rate cuts in the latter half of the year, providing some relief to consumers. However, meaningful economic improvement is contingent on tangible progress in resolving South Africa’s structural constraints, including in logistics networks spanning ports and rail.

“The consensus outlook among the major banks settles on a slow, structurally limited uplift for South Africa’s short-term growth prospects,” said Roopnarain.

PwC’s study of banking results is based on the results of Absa, Capitec, FirstRand, Nedbank and Standard Bank.