fbpx

South African Companies Regional Foray Paying Off

South African Companies Regional Foray Paying Off

Written by Thekiso Lefifi | From BDlive

Investments in other African countries are starting to pay off handsomely for some South African companies, such as banks, which earned R5.1bn from operations on the rest of the continent in 2013, up 27.5% from the previous year, while return on equity beat that from local operations.

And, according to consultancy EY, earnings from the rest of Africa operations are growing much faster than here.

The big four banks’ Africa expansion strategies are at different stages, and will be beneficial to the groups, according to EY’s lead financial services director, Emilio Pera. He said the banks’ offerings have to be relevant because they compete with strong international and regional players.

Standard Bank, Africa’s largest bank by assets, reported in its recent annual financial results that return on equity from its operations outside South Africa grew from 16.6% to 19.7%. Despite losses increasing in the personal and business banking portfolio, overall headline earnings from the rest of Africa rose 44% during 2013, driven by the bank’s strong corporate and investment banking focus.

Over the past two years the Johannesburg-based lender has increased its exposure to African countries other than South Africa from 17 to 20 while reducing its exposure outside the continent.

Absa Group, now known as Barclays Africa, reported that retail and business banking earnings elsewhere in Africa increased by 35% from R1bn to R1.35bn.

Discover How Affordable Peace of Mind Can Be:
Get Your Life Insurance Quote Today!

Read more at BDlive