Fitch expects modest increase in loan impairments at SA banks
The ratings agency says unsecured retail and SME loans are the main sources of problems for the sector as interest rates continue to rise in 2022
Fitch Ratings says while it expects SA’s banks to achieve similar profit levels in 2022 as they did in 2021, they are likely to see a slight rise in loan impairments as increasing interest rates and a weak economy act as a drag on local consumers.
The ratings agency expects economic growth in SA to slow to 1.7% in 2022, down from an estimated 5.1% in 2021, as rising unemployment and the effects of global travel bans on the hospitality and tourism sectors serve to undermine expansion. While the local economy has been supported by a relaxation in Covid-19 containment measures and high commodity prices, Fitch says possible rand depreciation, inflationary pressures, a record jobless rate, load-shedding, future Covid-19 infection waves and sociopolitical risk could counteract those positives...
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