Classic Business

Mike Brown, MD ETFSA

The topic of education has never been more in focus in the country with the matric results being followed in quick succession by controversies around NSFAS and funding and now recently the higher education student protest.

There are challenges both socially and economically that affect education at all levels from grassroots right up to higher education.

But really if we are honest, to ease the challenges faced at the higher education level we should, collectively as a country (both private and public sector and community), rally together to fix the challenges at the grassroots level.

These challenges include lack of access to digital learning, lack of proper infrastructure be it in classrooms or toilets, lack of learning equipment and lack of training for educators, and much more.

Michael Avery recently came across a model, which aims to address several challenges that impact learning in most disadvantaged schools.

Avery sat down with Steven Lebere, CEO of Adopt a School, to talk about this exciting model to help fix education from the ground up.

Wayne McCurrie, portfolio manager, FNB Wealth and Investments

And

Martin Harris, Premium Client Manager at IG Markets

Banks and financials fell 7,5% and 5,5% respectively last week as the 2020 earnings season revealed what many had feared, the bulk of the banks suffered swinging losses due to Covid.

According to an overview of banks’ results by PwC, aggregate headline earnings for all of the banks declined by more than 48% in 2020 compared to the previous financial year, return on equity more than halved from 17.8% to 8.3%, and provisions for bad debt increased by 2.5 times.

The first rule of banking is always say no. And there is good reason that bankers have earned the reputation of being fair weather friends.

You have to understand a bank’s balance sheet. A bank is THE most highly geared entity in the world – it operates on a thin sliver of capital and the rest is equity. If bank has a bad debt, a non performing loan, it has to do a deal roughly 33 x times bigger to recoup the original loss

If you lend out say R100 at 10% prime to use rounds numbers for the example, and the bank borrows at 7% the repo rate, the profit on that loan is only R3. So you lose that R100 and you have to a deal 33 times the original deal size. It’s why credit vetting matters and why banks are and were unsuited to the task of the treasury loan guarantee scheme.

Michael Avery spoke to Costa Natsas, financial services leader of PwC Africa, & Nolwandle Mthombeni, senior banks analyst at Intellidex, about what we can learn from this earnings season.

Michael Ball, Project Development Manager for Africa and Europe within Wärtsilä Development and Financial Services

Gordon Angus, Executive Director, SAEFA

Roy Douglas, CEO

Peet Serfontein, Unum Capital

Danie Pretorius, CEO of Master Drilling

Nesan Nair, portfolio managers at Sasfin Securities