FirstRand CE blames economic malaise for low lending
Banks have been left with little room to extend credit as uncertainty continues to weigh on confidence
Cash-flush FirstRand, which has R19bn in surplus capital, says the country’s economic malaise has left banks with little room to extend credit, leading it to return billions of rand to shareholders, while retaining R4.9bn to account for regulatory and macroeconomic uncertainty.
"Our job is to extend credit. This is not a function of the banking sector pulling back, but of demand and affordability," group CEO Johan Burger saidon Thursday after presenting the group’s results for the year to June.
The possibility of a local currency credit-ratings downgrade was built into the bank’s capital position, he said.
"A downgrade of SA’s local currency credit rating to noninvestment grade by S&P Global Ratings and Moody’s would hamper our ability to raise funding in rand and cause massive capital outflows on the country’s automatic exclusion from global bond indices."
If you are already a subscriber, please click on the following link below to go to the full article: FirstRand: economy has knocked lending
* Premium content is not yet available on the app. Please use the desktop site to subscribe.