Vehicle finance still a tough space for banks
It is the only segment experiencing increasing delinquencies, according to a new report
The vehicle-finance market is the only segment where delinquencies continue to rise, according to the latest information published by credit bureau Transunion. This could indicate that the country’s big four banks, which dominate the market with more than 97% market share, may have extended credit less carefully than planned, and more pain is likely to follow in future results. This was revealed in Transunion’s inaugural insights report, which published data for the September quarter, showing that consumers who missed three or more successive payments on their vehicles had increased by 50 basis points to 4.1% by value versus the same quarter a year ago. This means that about R17bn of the R414bn vehicle and asset finance (VAF) book is delinquent, or nonperforming. “This is consistent with the trend we have seen over the last two years in which delinquency rates have risen in vehicle finance. Rather surprisingly, given the tough economic climate, it is the only market (where) we have ...
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