THE SARB ENABLES BANKING SECTOR’S MASSIVE PROFITS AT THE EXPENSE OF THE WORKING CLASS
By SAFTU Admin
IN SUMMARY:
SAFTU’s Condemnation of Executive Pay: SAFTU criticizes the high earnings of banking executives while the working class suffers from poverty.
- Executives from South Africa’s top banks (Capitec, Nedbank, Investec, FNB) earned millions in 2023.
- Fani Titi, CEO of Investec, earned R175 million (R475,452 per day), which is equivalent to a year’s salary for an average worker.
- Combined earnings of top executives from the four banks in 2023 amounted to R456.24 million.
Economic Inequality: South Africa is described as the most unequal country in the world, with a Gini Index of 63.
- In 2022, 75% of the South African workforce earned less than R5800, while the cost of a food basket for an average household was R5300.
- SAFTU argues that workers’ low wages are wrongly blamed for economic issues, rather than executive pay.
Interest Rates and Wealth Transfer: Since the COVID-19 pandemic, the South African Reserve Bank (SARB) has raised interest rates to 8.25%, the highest in 15 years.
- This policy has led to a wealth transfer from the working and middle classes to bankers through bank charges, loan interest, overdrafts, etc.
- By 2022, major banks like Capitec, FNB, ABSA, and Standard Bank recorded profit increases of over 10%.
Critique of SARB’s Policy:
- SAFTU claims SARB’s interest rate hikes are enriching bankers rather than protecting the purchasing power of the working class.
- These policies, framed as anti-inflationary, are viewed as a pretext to benefit banking executives and investors.
