Bankers have been quick to downplay weak results from one of South Africa’s largest providers of unsecured loans, saying the decline in profits at African Bank Investments Limited (ABIL) does not portend more wide-spread problems in the sector.
South Africa Financial Services
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Economic update | South Africa: Troubled lending
21 Dec 2012
Unsecured lending is on the rise in South Africa, sparking debate over whether the growth rate in this loan category should be reined in to avoid a potential credit bubble and protect vulnerable consumers from entering into a cycle of over-indebtedness.
Economic update | South Africa: Bonds remain steady
13 Sep 2012
Fears that the recent violence at mines in South Africa may push up borrowing costs and undercut investor confidence have been allayed, at least for the moment, with money flowing back into the country’s bond market. However, longer-term concerns over the local debt market remain.
The recent credit downgrade of five of South Africa’s largest domestic banks by one notch has prompted quizzical reactions from the government and local financial community, coming just as four of the banks announced improving earnings growth and a decline in bad debt.
Insurance sector leaders in South Africa are hopeful the country will not be too deeply impacted by the deepening debt crisis in Europe, with many policy writers expressing cautious optimism as the new year gets underway. The implementation of EU financial norms and a national health insurance scheme could prompt some changes in the sector in 2012.
Investment rates among black South Africans on the Johannesburg Stock Exchange (JSE) have held steady over the past 12 months, despite market fluctuations and uncertainty over the local and global economy. Burgeoning pension and trust fund investments could also see increasing participation rates in South Africa’s black capital markets in coming years.
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