FNB CEO Jacques Celliers Picture: BUSINESS DAY
FNB CEO Jacques Celliers Picture: BUSINESS DAY

The full effect of the nationwide shutdown on businesses and consumers will become apparent in the next three months, says FNB CEO Jacques Celliers.

“We think April, May and June are going to be the real pressure points,” Celliers told Business Day on Monday, as FNB joined the ranks of SA’s large banks that have launched measures to provide relief to customers hit by the Covid-19 outbreak.

The Prudential Authority of the SA Reserve Bank, which regulates the financial sector, announced draft directives over the weekend that will relax capital and liquidity requirements for banks during the crisis — injecting an estimated R320bn into the financial system — and help them provide debt relief measures to embattled clients.

The stop to business activity that comes with the 21-day lockdown will hurt SA’s already fragile economy, with growth already expected to shrink this year, placing stress on businesses and households alike.

Joining Standard Bank and Absa who have also announced Covid-19 support measures, FNB is rolling out relief for clients in good standing, between April and June.

The offering is intended to cover both individual and commercial customers — regardless of the type of credit they hold with the bank, and will help get them through any cash-flow constraints in the coming three months, said Celliers.

“What we are facilitating is effectively a bridge facility or a loan at favourable rates and no fees, to make sure the customers’ payments are honoured,” he said.

The facility will enable an FNB customer to cover instalments for three months. This will act a as a moratorium on customers having to repay their credit, he said, and means FNB will not have to trigger collection activities on unpaid debt.

“So we can keep them in their house, keep them in their cars, make sure they’ve paid their employees and when we can open the doors again, that they will be operational and fully running,” he said.

The bank opted for this mechanism as it enabled FNB to cover as broad a number of its customers as possible.

About 40%-45% of FNB’s 8-million customers have a credit relationship with the bank, said Celliers. He expects that the Covid-19 intervention will cover about 70% of those customers, though he is reluctant to put a figure on how much this will amount to.

As part of the group, FNB has also contributed to FirstRand’s SPIRE initiative — intended to help the health-care system scale up its response to Covid-19 — with a particular focus on testing equipment, protective clothing and ventilators for hospitals.

FNB’s announcement followed Absa’s, which on Sunday said it would offer relief to consumers, business banking and wealth customers who have Absa credit products, with customised solutions for corporate customers.

The programme will allow customers to either continue paying reduced instalments by agreement with the bank, or defer payments for three months.

Absa will roll out these measures in other countries in Africa subject to the laws applicable in those countries.

Standard Bank added a second wave of relief measure to those it announced last week. On top of payment holidays for students and small businesses, it said that customers earning R7,500 or less would receive three-month instalment relief if they are not in arrears on any of their accounts including home loans, vehicle and asset finance and credit cards.