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Virus wipes 20% off FNB customers’ income

In line with guidance from other South African lenders.
Image: Dean Hutton, Bloomberg

The average income of customers at South Africa’s First National Bank plummeted by about 20% during the nation’s lockdown as people took pay cuts or had less work to do.

FirstRand Ltd.’s retail banking unit also experienced a “major drop off” in transactional activity and credit-card spending as businesses closed and people stayed home, FNB’s retail banking head Raj Makanjee said on a call with reporters on Tuesday. Credit growth suffered as South Africans opted to save, he said.

The slump in business is in line with guidance from other South African lenders that earnings for the first half of the year will probably decline by at least 20% as measures to curb the pandemic take their toll on the finances of customers. Unlike its main competitors, FirstRand reports annual results through June.

Banks have all extended relief to clients to help shore up their cash flows, including payment holidays and emergency loans. South Africa moved to alert level 3 from June 1 after being at level 4 for a month. That was preceded by five weeks of a strict level 5 lockdown that shuttered almost all activity except essential services. The central bank sees the economy contracting by 7% in 2020.

FNB has also adjusted its eBucks rewards programme to offer Netflix and Spotify Technology SA discounts as clients spend more time indoors, Makanjee said.

Pressure to outshine peers persists for South Africa’s biggest banks, which have seen several new players enter the market in recent years, while intensified competition in the industry has also seen incumbents snatching some clients, Makanjee said.

“When the economy goes through this level of challenge we do expect a level of consolidation. It’s going to be very difficult for all competitors to stand and cope with the magnitude of the impact,” he said. “Certainly we want some of these new competitors to be strong but we think it’s going to be tougher.”

Read: FNB really wants you to draw cash at tills

© 2020 Bloomberg L.P.

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Virus had nothing to do with it! The regime decided to destroy the economy for “reset” it according to Shmoza

Thought this was about cyber-security! *lol* (…viruses and bank balances…)

Received yet another Covid-19 SMS from Govt this morning that states “….keep social distancing & wash your hands regularly. It is all in your hands…”, and I thought….if this is ALL to it, why the economic lockdown?

…roll forward into the next 2021 SARS Filing Season next year, upon a return audit, SARS assessor will ask questions like “explain why your business income or rental income dropped compared to prior years?”
…WTF?!

Reason: “Covid-19”

…in fact, it was NOT the virus. It was Govt’s decision.

So Mr Kieswetter’s staff will just need to pose the same question to their colleagues at The Presidency. Only the Presidency is answerable for this entire economic mess!!

Clearly that is not all there is to it. They need to give it to you in little pieces because public education in SA is very bad.

And your responses here on Moneyweb testament to it.

Obviously there is more to it than that. You know this. How many sms’s would you like to have what you already know explained to you?

Income was being decimated by ANClong before Covid-19.

Speak for yourself please.

I speak truth. For some the truth hurts.

End of comments.

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