Expropriating property without compensation could "trigger a classical banking crisis", Nedbank chief executive Mike Brown told MPs.

PARLIAMENT  - Expropriating property without compensation could "trigger a classical banking crisis", Nedbank chief executive Mike Brown told MPs on Friday.

Brown was participating in the last round of public hearings by a parliamentary committee probing whether section 25 of the Constitution needs to be amended to allow government to expropriate land without compensation in the interests of land reform.

"Every bonded property that is expropriated without compensation is likely to result in a direct impairment of that land on the balance sheet of a lending bank," he said.

Brown said if one assumes the expropriation without compensation on 10 percent of Nedbank's R153 billion residential mortgage bill, the bank would lose R15 billion.

Nedbank's commercial residential bill stood at R162 bln, while in agriculture that figure stood at R17 billion.

"As a bank we would be left with few options in order to protect our capital and depositors," said Brown.

"Maintaining confidence in the banking system is absolutely imperative for depositors to feel that their money is safe."

- African News Agency (ANA)