South African Financials Clearer near-term drivers & fewer cross currents favors banking stocks over life & non-life insurers

Research evidence excerpt

South African Financials Clearer near-term drivers & fewer cross currents favors banking stocks over life & non-life insurers

J P M O R G A N CEEMEA Equity Research

09 June 2026

South African Financials

Clearer near-term drivers & fewer cross currents favors

banking stocks over life & non-life insurers

June is shaping up as a strong catalyst window in SA Financials: after a noisy set CEEMEA Financials

ACof life insurance trading updates and into the Big‑4 banks’ June trading statements, Baron Nkomo

we continue to prefer banks over life and short-term insurers due to higher-quality, (27-11) 507-0385

steadier earnings with a clearer set of near-term drivers and risks (guidance on loan baron.nkomo@jpmorgan.com

growth and credit defaults), versus insurance where results are still being pulled by J.P. Morgan Equities South Africa (Pty) Ltd.

cross‑currents currents (strong sales/flows but softer VNB margins, headline Pooja Ruia

earnings sensitivity to shareholder investment returns, and short‑term insurance (91-22) 6157-3688

pooja.ruia@jpmchase.com

underwriting margins that remain solid but increasingly look late‑cycle). We J.P. Morgan India Private Limited

believe that banks offer both cleaner fundamentals and better set‑ups for tactical

positioning into updates, while insurers have delivered good operational execution

yet the outlooks are nuanced by volatile market factors that are less tied to

underlying franchise momentum. This trade is also reinforced by our proprietary,

SA financials weighted valuation score (table 1) which consolidates the many, at

times conflicting, metrics used to value banks and insurers into a single,

comparable, forward-looking framework: banks look cheaper than insurers