Unpaid loans are expected to cost South Africa’s banks billions in 2024.
South Africa’s big banks are expected to lose R74 billion in 2024 from unpaid loans as South Africans feel the pressure of rising living costs and continued high interest rates. , which used Absa’s recent financial results as an example of how local banks are being affected by South Africa’s challenging macroeconomic conditions.
S&P said Absa’s credit loss ratio of 1.3% was in line with its expectations, as it expects South African banks to feel pressure throughout 2024 and subsequently tighten the extension of credit.Standard Bank noted that in South Africa, credit impairment charges increased across all portfolios, compounded by the non-recurrence of credit recoveries on the payment holiday portfolio in 2022 .“Our clients are likely to remain constrained until interest rates start to decline.
“This is due to the challenging macroeconomic environment, characterised by high interest rates and food prices,” it added.
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