Renee Bonorchis
STANDARD Bank customers were making progress in repaying debt, while lenders including Investec expected an increase in soured loans as the economy slowed, Standard Bank said yesterday.
“In all of our books we see a slight improvement in consumers’ ability to repay,” Ben Kruger, the bank’s joint chief executive, said on Bloomberg Television. “We might well have seen the worst.”
Impairments at Standard Bank rose 2.1 percent to R19.9 billion in the six months to June, it said on August 14. South Africa’s growth is at the weakest since a 2009 recession and interest rates have risen twice this year to combat inflation. Investec chief executive Stephen Koseff said on September 19 that his bank was probably at the low end of the bad-debt cycle, with impairments expected to increase because of slowing growth.
“There’s no doubt that consumers are struggling,” Kruger said. “A lot of consumer difficulties are as a result of the labour situation.
“Reductions in the price of fuel will be very positive for the country and a slightly stronger rand in due course would also be quite good.”
The rand has fallen 3.9 percent against the dollar this year. African Bank collapsed in August.
The collapse “was very contained to the specific issues” African Bank had, such as owning a furniture retailer, Kruger said. “The other banks are all very well-capitalised, very profitable. We don’t see any further contagion.” Standard Bank rose 1.25 percent to R131.50 and Investec gained 0.73 percent to R96. – Bloomberg