Recent geopolitical turmoil in the Middle East has once again drawn global attention to risks, yet South Africa's economy has demonstrated impressive resilience. Compared to most other economies, the South African rand maintains a stronger position than during previous global crises.
This stability is driven by a targeted strengthening of confidence in the country's policies. Such measures include lowering the inflation target and expanding the primary budget surplus, which has been observed since 2023/2024 after fifteen years of deficit. The planned fiscal trajectory anticipates reaching a peak public debt level of 78.9% of GDP this year, followed by a reduction to 75% by the end of the decade.
Konstantin Makrelov, recently appointed head of the Reserve Bank's economic research department, highlighted the improvement in the country's fiscal indicators during the African Economic Conference in Abidjan last week. He noted that South Africa is better prepared to absorb shocks due to sound monetary and fiscal policy than when facing high debt-to-GDP ratios or inflation. Makrelov also pointed to the market's negative reaction to the removal of Finance Minister Nlankhla Nene in 2015 as evidence of the high cost of lost trust.
Financial discipline has led to credit rating upgrades: S&P increased South Africa's long-term foreign currency rating by one notch in November 2025—the first increase in two decades. Moody's changed its outlook from 'stable' to 'positive' at the end of May 2026, and Fitch upgraded South Africa's long-term credit rating on June 5, marking the first increase in 21 years.
Resilience has also been bolstered by financial sector reforms, particularly concerning the requirements of the Financial Action Task Force (FATF). Deposit insurance now operates through the Deposit Insurance Corporation, and the country has developed its own mechanisms for emergency liquidity and problem resolution. These changes have strengthened an already developed and respected financial services sector, which includes the Reserve Bank, the National Treasury, and the Prudential Authority.
The CEO of the Prudential Authority, Fundzi Tshazibana, stated that this robustness served as a buffer during the war with Iran, and that South Africa is now more resilient to external shocks than during the Covid-19 pandemic or the market instability following Russia's invasion of Ukraine.
This resilience is now being directed towards ensuring energy security. Minister of Minerals and Energy, Gweed Mantsashe, presented a strategic oil reserves policy draft aimed at replacing the country's voluntary approach to fuel storage. According to the plan, the state must hold strategic raw material and petroleum product reserves for 60 days, while private wholesale distributors must hold an additional 21 days at their own expense. This is the first increase in strategic reserves since the 1970s.
Mantsashe's proposed intervention is a positive step, as it finally addresses a historical issue—the sale of 10 million barrels of the country's strategic oil reserves in 2015/2016 at undervalued prices. This deal was later deemed illegal by the Western Cape High Court, but no one was criminally charged for it.
Another positive development for South Africa is the launch of the ninth-generation Hilux model by Toyota at the Prospecton plant in Durban last week. This model is accompanied by an investment of R10.4 billion to modernize the plant for the new type, making it the company's largest investment in South Africa in its history. This reflects confidence, as other markets compete for similar investments.
However, President Cyril Ramaphosa's address during the launch was particularly encouraging. He stated that South Africa's critical minerals, combined with advanced manufacturing and local processing, could transform the country into a 'leading global hub for future mobility.' He emphasized that realizing this potential fully requires continued improvement in the efficiency of the logistics system, including reliable ports, efficient railways, and modern infrastructure, which determine global competitiveness.
While he may be accused of excessive optimism, he is correct that realizing these opportunities depends on the active promotion of reforms. The author notes that the results of the BLSA Reform Tracker will be published from April to June, and while there is good news, there are also areas of concern. The main difficulty of the ambitious reform program in key areas such as energy, transport, water supply, and local government lies in its complexity and multi-layered nature, requiring time for full implementation and yielding results only in the long term.
The more parts of the broad reform program that are successfully implemented, the more effective economic framework will be created for businesses, promoting accelerated economic growth. Ultimately, this is the best way to create jobs and make a significant impact on unemployment rates. Since global events and external shocks are inevitable, one can only control the degree of preparedness for the next crisis. The country is moving in the right direction fiscally and in terms of reforms, and collaborative effort will help solve problems and lay the foundation for the prosperity of future generations.
July is observed as National Savings Month, yet for a significant portion of South Africans, the idea of setting aside funds for the future is increasingly viewed as a luxury rather than an achievable financial goal.
Recent studies indicate that the primary issue is not a lack of financial discipline, but the growing pressure households face just to cover monthly expenses. When a family is forced to choose monthly between groceries, fuel, electricity, and other necessary expenditures, saving money often takes a backseat. South Africans are not necessarily undersaving due to unwillingness; often, they simply do not have the same financial cushion they had a few years ago.
According to TransUnion's Consumer Pulse Report for the second quarter, inflation remains the main financial concern for 79% of the South African population. Furthermore, nearly a quarter of consumers expect to miss at least one bill or loan payment in the coming months. This data confirms that many families no longer have surplus income, as even salary increases are quickly absorbed by the rising cost of living. Mortgage payments, electricity bills, municipal tariffs, medical expenses, insurance, fuel, and food consume an increasing share of the family budget.
Data from the South African Reserve Bank shows that households frequently spend more than they earn, and this trend is exacerbated by the rising cost of living and debt burden. In some cases, consumers are forced to rely on credit and savings just to make ends meet because their income is insufficient.
This serves as a warning: when people lack financial reserves, even a relatively small unexpected expense, such as car repairs or a medical bill, can lead to debt. Nevertheless, National Savings Month provides an important opportunity to rethink financial security.
When considering savings, people often focus on retirement or large investments. However, the priority should be financial stability. Building an emergency fund is perhaps the most crucial form of savings a household can establish.
There is a common misconception that one should wait until 'enough' money has accumulated before starting to save. In reality, consistency is far more important than the amount. Even small monthly contributions help build healthy financial habits. The value of time also cannot be underestimated: many focus only on the total savings amount, whereas the timing of when savings begin has a much greater impact on long-term financial outcomes.
National Savings Month should not cause guilt among South Africans regarding their habits. The reality is that many households are already under immense financial pressure. The most important thing is to take control of the situation. This starts with creating a realistic budget and a clear plan for both short-term and long-term financial goals. Financial security is rarely achieved through a single major decision.
Many try to save what is left at the end of the month, but in practice, such leftovers almost never exist. It is much more effective to treat savings like any other fixed monthly expense and automatically transfer that amount at the beginning of the month. After all, mortgage, car loan, and insurance payments are made first. Your future financial security deserves the same priority.
Saving is not just about cutting expenses; it is also about finding ways to increase income where possible. Many South Africans supplement their earnings through freelancing, online services, consulting, or starting a small business. Even a relatively modest additional income that is regularly saved or invested can significantly improve a household's financial stability over time.
The Center for Economic Research and Reforms (CEIR) presented an updated Bank Rating, based on the 'Bank Activity Index,' for the second quarter of 2026. During this period, the banking sector demonstrated stable development, characterized by an increase in the deposit base and profitability, a decrease in the share of non-performing loans, and a reduction in dollarization, while the capitalization level remained high despite a slowdown in asset growth rates.
The study covered 34 commercial banks in the republic. For comparison purposes, these banks were divided into two groups: 20 classified as large and 14 as small. The index was calculated using 27 sub-indicators, grouped into 8 main areas, including aspects such as capital adequacy, asset quality, financial intermediation, and accessibility, as well as profitability and liquidity.
When calculating indicator values, comparisons were made with the average data across the entire banking system and compliance with applicable international standards, particularly the requirements of the Basel Committee on Banking Supervision, which aligns with generally accepted international financial practices.
As of June 1, 2026, the assets of the banking system reached 984.4 trillion sums, representing a 19% increase compared to the previous year. Liabilities grew by 18.4% to 838.8 trillion sums, while the basic market structure remained unchanged. Sixty-two point seven percent of total assets and sixty-six point one percent of the loan portfolio belong to nine state-owned banks.
It is noted that deposit growth outpaced lending rates: over the year, credit investments increased by 12%, while the volume of deposits grew by 33%. This circumstance contributes to strengthening the banking system and maintaining a high level of liquidity. A difference in collateralization is observed: in state-owned banks, there are 57 sums of deposits for every 100 sums of loans, whereas in private banks, this figure is 103 sums, indicating greater dependence of state institutions on external funding sources.
The financial results of the banking sector significantly strengthened: net profit increased by 66.7%, reaching 8.5 trillion sums. The key factor was the 2.5-fold increase in non-interest margin to 15.8 trillion sums. As a result, Return on Assets (ROA) rose from 1.9% to 2.4%, and Return on Equity (ROE) increased from 10.3% to 14.5%. Furthermore, the share of highly liquid assets grew by 4.2 percentage points, reaching 21.6%.
Asset quality improved as the share of non-performing loans (NPL) decreased from 4.1% to 3.7%. Nevertheless, in some state and private banks, the NPL level remains relatively high. Dollarization further decreased: the share of foreign currency loans fell from 41% to 39%, and the share of foreign currency deposits dropped from 24% to 19%. Capital adequacy ratios consistently exceed the minimum established requirements by 1.5 times.
Based on the second quarter of 2026, changes occurred in the positions of 12 out of 20 large banks: 7 improved their rankings, 5 declined, and 8 maintained their current positions. The rating dynamics were determined by fluctuations across various components of the Index.
The positive trend of the Index was recorded mainly in parameters such as financial accessibility, capital adequacy, asset quality, and financial intermediation. However, several banks faced a decline in positions regarding liquidity, management efficiency, and asset quality.
In terms of financial accessibility, 12 large banks showed increased activity, while 4 lost ground. The greatest progress was made by 'Hamkorbank,' 'Infibank,' 'Uzpromstroybank,' and 'Turonbank,' each rising two positions. Significant weakening was recorded by 'Microcreditbank'—a drop of 11 positions.
Regarding financial intermediation, 7 large banks improved their results, while 9 showed a decline. 'Orient Finance Bank' made a strong leap, rising 10 positions, and 'Turonbank' improved its result by 5 positions. The sharpest decline in activity was recorded by 'Microcreditbank'—a fall of 10 positions.
In terms of asset quality, 9 large banks strengthened their positions, and an equal number failed to maintain them. 'Ipoteka Bank' demonstrated the greatest increase in activity—a rise of 7 positions. 'Uzpromstroybank' also rose 3 positions. Weakening was recorded by 'Tenge Bank' (a drop of 5 places) and 'Anor Bank' (a drop of 4 positions).
In the area of capital adequacy, positive dynamics were observed in 8 large banks, while 9 maintained their positions. The greatest strengthening was shown by 'Davrbank' and 'Ipotekabank'—by 3 positions each. Meanwhile, 'Tenge Bank' showed a significant decline, losing 10 positions.
In terms of management efficiency, 7 large banks improved their positions, and the same number declined. 'Ipotekabank' became the leader in dynamics, rising 7 positions. Pronounced declines were shown by 'Tenge Bank' (losing 7 places), followed by 'Infibank' (a drop of 4 positions) and 'Davrbank' (a drop of 3 positions).
Bank activity regarding profitability was distributed almost evenly: five banks improved their positions, five declined, and ten maintained their previous standing. 'Orient Finance Bank' showed the greatest improvement (rising 2 positions), while 'Asia Alliance Bank' noted the most noticeable weakening (a drop of 2 positions).
In the liquidity category, 3 large banks improved their positions, while 6 showed a decline in activity. 'Orient Finance Bank' showed the greatest growth (rising 9 positions). 'Tenge Bank' improved its result by 3 positions. Significant decreases were recorded by 'Asaka Bank' (a drop of 5 positions), 'Uznatsbank' (a drop of 3 positions), and 'Ipak Yuli Bank' (a drop of 2 positions).
No changes occurred in the top three of the aggregate rating of large banks: 'Kapitalbank' held first place, 'Hamkorbank' second, and 'Asia Alliance Bank' third. 'Ipotekabank' showed the most pronounced positive dynamic in the aggregate rating, rising 4 positions to take 7th place, which resulted from improvements in asset quality, capital adequacy, and management efficiency indicators.
Following in terms of activity growth were 'Davrbank' and 'Infibank,' both gaining 3 positions. 'Davrbank' reached 5th place due to improved financial performance in the areas of accessibility, asset quality, capital adequacy, and profitability. 'Infibank' took 6th place, supported by high results in financial accessibility, capital adequacy, and asset quality.
A noticeable decline in the second quarter was demonstrated by 'Ipak Yuli Bank,' which lost 4 positions and took 8th place in the overall rating, linked to deteriorating financial intermediation and liquidity indicators. Among the banks showing a decline in activity, 'Anor Bank,' 'Halk Bank,' and 'Tenge Bank' stand out, each losing 3 positions.
'Anor Bank' took 9th place amid deteriorating financial accessibility, asset quality, management efficiency, and profitability indicators. 'Halk Bank' moved to 10th place due to declining asset quality, management efficiency, and profitability. 'Tenge Bank' took 13th place, correlating with a decrease in capital adequacy, management indicators, and asset quality.
The top three in the small banks rating also remained unchanged: 'TBC Bank' held first place, 'Universal Bank' second, and 'AVO Bank' third. 'Octobank' showed the strongest positive dynamic in the aggregate rating, rising 3 positions to take 6th place, ensured by improvements in profitability, financial accessibility, and management efficiency indicators.
'Khayat Bank,' 'UzKDB Bank,' 'Soderot Bank,' 'Madad Invest Bank,' 'Open Bank,' and 'Uzum Bank' gained one position, with their improvement linked to enhanced financial accessibility, asset quality, liquidity, and capital adequacy indicators. On the other hand, 'Garant Bank' showed a noticeable decline, dropping 4 positions to take 14th place due to worsening financial accessibility, asset quality, and liquidity indicators.
Among the banks that declined, 'Poitakh Bank' stands out, losing 3 positions and taking 9th place. 'Apex Bank' and 'Ziraat Bank' each dropped one position due to changes in individual Index components.
National Savings Month, observed in July, is an initiative by the South African Savings Institute (SASI) aimed at promoting healthier financial habits across the country. However, this campaign takes place during a period when many South Africans are facing rising costs of living, increased borrowing expenses, and significant strain on household budgets.
As interest rates remain high and inflation is near the upper end of the target range set by the South African Reserve Bank, many consumers find it difficult to put money aside. Nevertheless, financial experts argue that saving becomes even more crucial under such conditions. They advise households to focus on building even modest financial reserves to cushion against unexpected expenses, further interest rate changes, or price increases, rather than waiting for more favorable economic conditions.
Over 80% of middle-income South Africans lack sufficient savings to cover expenses for even one week. Financial planners note that closing even part of this gap can significantly improve a household's ability to withstand financial shocks without resorting to debt.
For many South Africans, purchasing a home represents the largest financial commitment. However, in the current interest rate environment, housing affordability extends far beyond simply accumulating a down payment. With a repo rate of 7% and a prime lending rate of 10.5%, monthly mortgage payments remain significantly higher than two years ago, placing additional pressure on new homeowners.
Brett Bendal, National Head of Sales at BetterBond, points out that prospective buyers often focus too heavily on saving for a deposit while underestimating the importance of maintaining financial reserves after acquiring property. He notes: 'We see many potential buyers diligently saving for a deposit, and then pushing themselves to the absolute limit of what they can afford or the maximum amount they qualify for in pre-approval.'
According to Bendal, true discipline lies not only in saving for the down payment but also in creating a buffer capable of absorbing a rate hike or several months of tighter cash flow after moving in. He strongly recommends that buyers stress-test their budget at a higher rate than offered and continue saving even after receiving approval. Since a mortgage is a decades-long commitment, the habit of saving that helped secure the deposit should not cease on the day the keys are received.
Bendal also reports that existing homeowners can benefit from making relatively small extra mortgage payments whenever their finances allow. Even an extra payment of R200 per month on a R2 million mortgage can have a significant effect over time. At a 20-year term at the current prime lending rate, this extra contribution will reduce the total interest paid by over R109,000 and shorten the repayment period by approximately seven months.
Consistent saving is only part of capital preservation. For South Africans planning overseas investments, paying international tuition fees, buying foreign property, or diversifying assets internationally, currency fluctuations and transfer fees can significantly erode the value of these savings. Harry Scherzer, CEO of Future Forex, believes that exchange rate awareness should become part of a broader national discussion on savings.
He emphasizes: 'People meticulously plan how much they will save in Rand, but far fewer carefully consider what actual value that saving will hold when it needs to cross borders. The Rand is considered one of the most volatile and reactive currencies in the world's emerging markets. If you are saving for an international goal—whether funding overseas investments, paying university fees, buying property abroad, or building a global financial future—time and structure matter. It is not about trying to predict the market, but about making informed decisions that minimize unnecessary costs.'
Scherzer adds that the larger the transaction, the greater the impact seemingly minor differences in exchange rates and transfer fees can have. 'This is why advance planning and understanding your options can be crucial. Protecting your capital depends not only on how much you save, but on minimizing preventable losses when that money eventually moves across borders.'
Financial experts acknowledge that households continue to face significant challenges, including rising fuel prices, increased interest rates, and general cost-of-living pressures affecting disposable income. However, they argue that financial resilience is built through consistency, not perfection.
Households that emerge from difficult economic periods in a stronger financial position are not necessarily those who accumulated the largest sums, but those who maintained the habit of regularly setting aside funds, even if the amounts were modest. As National Savings Month highlights, the importance of financial preparedness remains clear: one should build a financial cushion before it is needed, test personal budgets under harsher financial conditions, not just current availability, and view saving as an integral part of long-term financial security, not as what is left over after monthly expenses are paid.
