The country’s moribund economy is dealing a hammer blow to the banks, which are facing profit declines of as much as 85%. The true extent of that pain will be laid bare when the lenders start releasing results next week in what is shaping up to be the worst earnings slump in at least 50 years. Africa’s most-industrialized nation was trapped in its longest downward cycle since World War II even before the coronavirus struck. A 30.1% unemployment rate, and little progress in reversing the malaise that threatens to push the economy to its deepest contraction in almost nine decades, is making it harder for consumers and businesses to repay loans and transact. The South African Reserve Bank in March eased capital rules for lenders to free up their balance sheets so they can better help customers with extra loans or by rescheduling existing credit. By the end of June, they had provided about ($1.8 billion in coronavirus-related relief, according to the Banking Association South Africa. Even if conditions deteriorate further, lenders are well armed to cope, with much more high-quality liquid assets to cover outflows than the regulator requires.
SOURCE: BLOOMBERG
More Stories
The Marshall Nature Reserve Gives a Different Glimpse of the Sudanese Capital
The Journey of Moving Tanzanians Around
Correcting Kinshasa’s Commodity Crisis
Can African Leaders Rate Themselves?
First Black African to Win Grand Tour Stage
Financing Dangote’s Fertiliser Dream Tougher than Expected
This is a Moment for the Women of Kenya
US Support in Somalia Couldn’t Have Come at a Better Time
A Symbol of Sudan’s Resistance
Families of Trapped Miners in Limbo
Google Translate Announces an Addition of 10 Languages Spoken in Africa
All Four Tourists Reported Missing in the Fish River Canyon have been Accounted For