South Africa Banks Rein In Lending

South Africa’s four biggest banks, pummeled by political wrangling and enmeshed in the country’s economic malaise, are increasingly shying away from their main role: lending, Bloomberg reported. “Credit extension is going to be low for the next two to three years, unless we see some real recovery in economic growth,” FirstRand CEO Johan Burger said by phone from Johannesburg on Thursday. “South Africa’s growth prospects remain weak and uncertain.” Banks are reining in lending as President Jacob Zuma’s administration struggles to reignite growth in the economy and cut unemployment, which has reached a 14-year high. Business confidence is at its lowest level since 1985 in the wake of efforts to diminish the central bank’s independence, eight failed opposition attempts to unseat Zuma and confusion over new mining rules. FirstRand, the continent’s largest lender by market value, on Thursday reported net interest income growth of 7% for the 12 months through June compared with an increase of 18% in fiscal 2016. Standard Bank, Barclays Africa and Nedbank all published first-half results in August that showed a similar pattern.