Fidelity bank banner Bayelsa State banner
Barclays Africa hit by bond arrears

By News Express on 01/08/2016

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 2,563


Barclays Africa, whose Absa bank is SA’s second-largest retail home loan provider, has reported a 77% surge in soured home loans. It is the first large bank to put a number on rising mortgage arrears as high interest rates make it increasingly difficult for households to afford their loan repayments.

This trend has been observed since early 2016, according to analysts. “Early in 2016, we did see an increase in mortgage loan arrears levels,” said John Loos, a property strategist at FNB, FirstRand’s retail arm. “This has much to do with a broad slowing in new mortgage-lending growth in recent times, the impact of a slowing economy and rising interest rates.”

Interest rates have risen 200 basis points since the Reserve Bank began its hiking cycle in January 2014.

Standard Bank economists found the hikes placed affordability under pressure, increasing mortgage payments by about R1,000 each month.

“What we have seen is rates have responded appropriately to the economic environment,” Barclays Africa CEO Maria Ramos said on Friday, following the release of Barclays Africa’s interim results.

Barclays Africa is the first bank to report its results for the six months to June, with Nedbank’s on Monday and Standard Bank on August 18.

In an update to shareholders in May, Nedbank said credit losses for the first quarter of 2016 had risen; while Standard said it had seen “some strain in the associated credit environments, resulting in a rise in the group’s credit impairment charges.”

FirstRand reports its annual results, which are not directly comparable, in September.

The 77% surge in Barclays Africa’s home loan impairments led to a 7% drop to R825m in earnings for its home loans unit, contributing to a 46% rise in credit impairments across the wider group.

Ramos said her banking group had seen the credit “cycle start to turn” in March. In April, it issued a warning that its credit loss ratio – the measure of total debt as a percentage of gross loans – had worsened noticeably owing to higher bad debt provisions and impairments.

This ratio came in at 1.29% on Friday, compared with 0.97% previously.

This included loans to banks. For consumer loans, the measure Barclays Africa previously used, the ratio declined further to 1.48% from 1.11%.

“We wanted to align to the rest of the market,” said Ramos. “The practice with other banks was to do that (report credit losses on loans to customers and banks).” She said the impairments were not unanticipated, and the group had moved quickly to make provisions on them.

Kagiso Asset Management investment analyst Meyrick Barker said the R1.7bn increase – with the corporate and investment bank accounting for R1.1bn of this amount – in Barclays Africa’s credit losses was a bit worse than expected.

“Given the current weak economic environment in SA and across the continent, we have been budgeting for a marked increase in credit losses from unsustainably low levels.

“Positively, a large part of the increase in credit losses was due to the bank setting aside portfolio provisions, given the tough economic outlook.” (BusinessDay South Africa)

Source News Express

Posted 01/08/2016 2:37:24 PM

 

Share on facebook Yahoo mail icon Gmail icon Share on Google+


 

CLASSIFIED ADS

 

You may also like...
Osun initiates moves to reduce governance cost, sustain...

Butchered British soldier: Second terrorist also of Nigerian...

Canadian activists blast Jonathan, says Nigeria should solve...

UNIAFRICA receives over 6,000 applications from prospective students...

Army alerts public on firing of 21-gun salute...

NDDC dismisses claims on missing N183.7 billion

Shippers seek review of customs tariffs

Jonathan setting traps for Buhari, says Rivers APC...

Journalist escapes death by whiskers as assailants invade...

Niger Delta Avengers set to resume attacks •Vow...

Disasters pose serious challenge to Nigeria’s economy, says...

Hadiza Bala Usman: Edging through dreaded paths

 

Latest News BREAKING: FG suspends floating of national carrier, Nigeria Air Political godfathers at war BOLA AJIBOLA: Before he bows out 2019: Ambode offered ‘big federal job’ to abandon governorship bid Woman sells baby to raise money for Christmas Delta community petitions Buhari over Army’s refusal to return occupied land Leadership tussle tears Enugu APC apart Disease outbreak looms as floods spread National Assembly passes another amended version of Electoral Act Amendment Bill Buhari, 87 other Presidents to address 73rd Session of United Nations General Assembly Over 100,000 cases pending in Federal High Court, CJ reveals Ohanaeze seeks to promote Igbo language in Lagos

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (394,312 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (375,622 views) Shameless Genevieve Nnaji exposes breasts in public (307,126 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (249,755 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (231,260 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (221,121 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (199,223 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (180,841 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (164,921 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (162,912 views) Lagos plane crash: Journalist releases victims’ names (157,575 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (146,463 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (62) Business & Economy (3,608) Business Verdict (51) Columnists (929) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (546) Features (651) Global Business Monitor (300) International (2,407) Interview (164) Live Commentary (28) Love Matters (143) News (38,968) Opinion (1,105) Pidgin (11) Politics (6,626) Religion (866) Sports (1,693) Stock Watch (33) AMA & Al Jazeera Global Update

 

CBN banner

Firstmobile banner

 

 

NEWS EXPRESS TV

I am Imo State's New Governor -- Okorocha's son-in-law Uche Nwosu...

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement