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: 2,466


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

REVEALED: 3 natural ways to get stronger erections, last 25 minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...

 

You may also like...
Mimiko has approved N500m ‘parting gifts’ for Ondo...

Alleged killer vaccine: Send your children back to...

Buhari hosts Facebook founder, commends him for inspiring...

Mad rush for Lake Rice in Lagos

Lagos suspends December monthly sanitation for holidays

Air Force deploys additional combat aircraft to battle...

You must obey the law, NBA tells Buhari...

World’s biggest aircraft that cost £25m crashes during...

IPMAN calls for govt. intervention over moribund refineries...

Assailants kill 30 herdsmen in Adamawa

Shell hails presidential directive to clean up Ogoni...

Fulani vs Enugu villagers: NEWS EXPRESS Regional Editor,...

 

Latest News Late winner revives Germany World Cup hopes Certificate forgery: Pro-Democracy activists drag Buhari to court •Allege impeachable offences Why Abaribe was arrested — Counsel APC changes slogan from ‘Change’ to ‘Progress’ Lawmakers, Bishop kick against FG plan to establish cattle ranches Anambra Police apologises as Inspector kills 38 years old woman •Blames accidental discharge Army wipes out 20 armed bandits in Zamfara, arrests 3 New political party targets recruitment of 10,000 members monthly 2019: Obasanjo visits Bode George, other Yoruba leaders Monarch’s death: Enugu Govt. sets up judicial panel of inquiry INEC rules out electronic voting in 2019 Benue killings: NAF deploys 1,000 troops, 300 Special Forces

 

Most Read Nigerian female sex addict opens up, says ‘I like it with both men and women’ (352,985 views) NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (352,815 views) Shameless Genevieve Nnaji exposes breasts in public (280,914 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (230,557 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (209,404 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (209,330 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (182,202 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (164,392 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (154,113 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (148,989 views) Lagos plane crash: Journalist releases victims’ names (144,161 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (135,883 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (50) Business & Economy (3,266) Business Verdict (44) Columnists (871) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (507) Features (607) Global Business Monitor (284) International (2,052) Interview (155) Live Commentary (28) Love Matters (124) News (36,446) Opinion (1,005) Pidgin (10) Politics (5,329) Religion (772) Sports (1,562) Stock Watch (30) AMA & Al Jazeera Global Update

 

CBN banner

Firstmobile banner

 

 

NEWS EXPRESS TV

Nigeria vs Iceland 2-0 All Goals & Highlights

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement