Here is how much tax South Africa’s ‘Big Four’ banks paid in 2023

South Africa’s ‘Big Four’ banks – Absa, FirstRand, Nedbank, and Standard Bank – paid the South African government R37.7 billion in direct taxes in 2023. 

This was revealed in PwC’s Major Banks Analysis report for the period ended 31 December 2023 after South Africa’s four largest banks had reported their financial results earlier this month.

PwC’s Major Banks Analysis presents the highlights of the combined local currency results of Absa, FirstRand, Nedbank and Standard Bank and incorporates key themes from other African banks. 

The financial services firm said the country’s major banks registered strong growth in a difficult operating environment. 

The combined headline earnings of these four banks rose 13.8% in 2023 to R113.2 billion, despite their average credit loss ratio rising to 102 bps from 82 bps in 2022. 

In South Africa, credit impairments increased on a combined basis to the upper ends of “through-the-cycle” levels due to low growth, consumer pressure and the adverse effects of load-shedding on South African households and businesses. 

Beyond South Africa, challenging fiscal positions and sovereign risks intensified in several other African territories where the major banks operate, generating higher sovereign-related risk costs. 

However, geographic diversity continued to benefit these banks as higher growth in other parts of Africa offset low growth in South Africa. 

PwC’s banking and capital markets partner, Rivaan Roopnarain, said these results are enviable by global standards and reflect the country’s strong financial sector. 

Their revenue benefitted from higher interest rates, balance sheet growth, and efficiencies from digitalising their services, said PwC. 

The outlook for 2024 is uncertain and complex, with the majority of the global population experiencing an election year. 

There is a wide range of possible outcomes and implications for the global economy, policy decisions and societal impacts, said PwC. 

Despite this, South Africa’s big banks will continue to make significant contributions to the local economy through their operations and the substantial amount of tax they pay to the government. 

In 2023, this rose to a total of R37.7 billion, with Standard Bank paying the most at R12.72 billion, followed by FirstRand at R12.59 billion in direct tax. 

The amount of tax the four banks paid is shown in the table below.