SA Financials: Feedback from the road: doing more work on SA but cautious to allocate

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SA Financials: Feedback from the road: doing more work on SA but cautious to allocate

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SA Financials

Feedback from the road: doing more work

on SA but cautious to allocate

Industry Overview

Over 50 meetings in SA, UK and US in past month 09 June 2026

Investors we met remain cautious on SA financials, although many agree that higher Equity

metal prices and a weaker US$ support the multi-year SA backdrop. Local investors have South Africa

been trimming overweight positions. Foreign investors are doing more work on SA but Financial Services

remain sidelined by macro uncertainty, particularly around the Iran war. The key Harry Botha >>

questions were consistent: 1) how would Iran-related disruptions affect SA; 2) which Research Analyst

stocks are most exposed to the macro; 3) is political risk re-emerging after President Merrill+27 113Lynch055 (South152 Africa)

Ramaphosa’s legal setback; and 4) how are reforms and infrastructure plans evolving? harry.botha@bofa.com

Capitec top choice; FirstRand interest also high

FirstRand and Capitec were the preferred choices in our meetings with foreign investors. Exhibit 1: We maintain Buy ratings on

Investors broadly accept Capitec’s medium-term growth opportunity in non-lending Investec, OUTsurance, FirstRand,

revenues, business banking, affluent clients, credit cards and insurance, while the Group Momentum, Sanlam, Capitec and

Discovery; Neutral on Standard Bank andremains the leader in mass market retail banking. Pushback on Capitec remains on

Santam; and Underperform on Nedbank,valuation, credit risk and whether insurance can sustain very strong growth rates. Many

Old Mutual and Absa.see scope to hold Capitec through share price weakness from higher CoR. FirstRand was SA Financials PO and rating