“SARB enables the banking sector to make huge profits at the expense of the working class”

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The South African Federation of Trade Unions has condemned what it called obscene wages paid to bank executives living in working-class poverty.

The company said the latest figures showed that directors of at least four banks in South Africa – namely Capitec, Nedbank, Investec and FNB – made millions of rands in executive pay.

As an example, Saftu said in a statement: “In the 2023 financial year, Fani Titi, CEO of Investec, earned R175 million, or R475 452 per day – in a day, what the average worker earns in a year.

“In the same financial year 2023, the total profits of the top management of the above-mentioned banks amounted to R456.24 million.

“This is happening in the most unequal country in the world.”

The union said that while there is a prevailing narrative in mainstream economic circles that the main contributor to South Africa’s low economic growth is the inflexible labour system and workers’ wage demands exceeding inflation, “the evidence shows that the mainstream ideological narrative is false”.

For example, 75% of South African workers earned less than R5,800 in 2022, while the average household’s food basket costs R5,300. What’s more, South Africa’s Gini index, which compares the pre-tax earnings of the highest earners with the lowest, is 63 – the worst in the world. In other words, South Africa is the most unequal country in the world. Yet we are expected to believe that the problem in the economy is the poor earnings of workers, not the high pay packages of corporate executives, Saftu said.

“This massive transfer of wealth to bankers comes in the form of bank fees, interest on loan repayments, overdrafts, etc.,” said Mogoshadi Maserumule, a Saftu spokesman.

Already in 2022, two years after the Covid-19 lockdown, the banking sector has recorded huge gains, with Capitec Bank, FNB, ABSA Group and Standard Bank all reporting profit increases of over 10%, she added.

“It is this transfer of wealth to bankers, aided and abetted by the SARB, that is the source of the large packages that go to top bank executives.

“This confirms what we have always said: that interest rates, raised by the SARB in the name of protecting the purchasing power of the working class and the poor from the vagaries of inflation, are merely a pretext to enrich bankers and their money market associates.”