Big Six lender Nedbank has upped provisions for bad debt in a sign of the amount of financial pressure faced by consumers. Moneyweb NtandoThukwana
Big Six lender Nedbank has upped provisions for bad debt in a sign of the amount of financial pressure faced by consumers. The bank issued a voluntary trading update on Friday for the four-month period to the end of April, and while earnings show mid-teen growth and the bank is earning robust income from interest, its impairments increased compared to the prior corresponding period “given the impact of a more difficult macroeconomic environment on consumers”.
While banks have been benefitting from the South African Reserve Bank’s rate hiking cycle, which has seen the repo rate increase by a combined 475bps since November 2021, consumers were being pushed into a tougher credit cycle as the cost of financing debt became more expensive. “The higher impairments and credit loss ratio reflect the impact of higher-than-expected interest rate increases, higher levels of inflation and higher levels of load shedding on consumers,” Nedbank said.
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