Estimates Keep Rising as Q3 Earnings Season Takes Center Stage

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Q3 Earnings: Watch SA Banks for Mixed Signals

Rising global yields pressure banks, but South African counters may offer selective opportunities.

As big US banks kick off Q3 earnings, a familiar theme emerges: rising long-term Treasury yields are squeezing net interest margins and slowing deal-making. That hits banks' profits even when the economy is stable. South African banks like Standard Bank and FirstRand face a similar squeeze as global rates feed into local funding costs, while rand weakness complicates loan book management. Yet, our banks have done better than expected navigating tougher conditions, with solid credit growth offsetting margin pressure. On the flip side, the rand remains sensitive to Fed moves and local risks. If global yields spike further or South Africa’s economic recovery stalls, bank earnings will suffer. Watch how these banks report on credit quality and fee income, as a rebound there could buoy shares. Naspers and Prosus feel hardly the same pressure, with tech growth insulated from rate changes, but forex volatility still matters for these USD-earning giants. this is just our opinion and not financial advice