Big four likely to bank 8% growth despite headwinds.

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Big four likely to bank 8% growth despite headwinds.

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Published Date: 2019-06-04 | Source: INCE|Community | Author: Mark Ingham

Big four likely to bank 8% growth despite headwinds.

The performance of South Africa's major banks continues to compare favourably to banks in the USA, Canada, and Australia.

Despite the likelihood that SA's economic pressures are set to lift bad debts and new high-tech entrants will erode market shares, an Ingham Analytics analysis suggests that SA's big four banks all have sufficient balance sheet strength and capacity to achieve an 8% increase in compound earnings. A 16.7% growth for Capitec is forecast.
The Ingham Analytics review sets a target price of R67 for FirstRand, R171 for ABSA, R200 for Standard, and R258 for Nedbank. Whilst FirstRand has outperformed the others and is likely to retain the lead, yield seekers should take a closer look at ABSA.

To access a detailed Ingham Analytics review of banking sector opportunities and hazards, click here.

Capitec does not fall into this category because of a different operating model but it is likely to continue outpacing the traditional "high street" banks. Despite muted economic conditions, there is value to be had in FirstRand, Standard Bank, ABSA, and Nedbank.



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