JOHANNESBURG (Reuters) - South African banks are looking at options ranging from debt consolidation to new ways of leveraging equity to avoid defaults when coronavirus-related debt relief measures end, industry officials said.
The banks gave customers in good standing relief on loans during the pandemic, including payment holidays of up to three months. But some consumers are still in trouble.
Some banks have offered extensions, while others like Capitec
Jacques Celliers, CEO of FirstRand's
Mortgages make up 59% of 489 billion rand ($28.88 billion) in loans considered at risk, according to the Banking Association of South Africa (BASA).
"We'll have to be very clever between all of us as to how do we navigate the property game," Celliers said.
Options could include leveraging the equity in properties, including family members' properties, in new ways, using pensions or granting term extensions on mortgages, he said.
Anton de Wet, chief client officer in Nedbank's
Standard Bank
Banks have already warned of rising bad loans: Capitec, for instance, said its credit impairment charge was 145% above expectation and it had increased provisions by 3.3 billion rand since February.
Some banks have applied a less-stringent approach to provisioning for loans granted relief after regulators allowed more flexibility in strict new accounting rules.
BASA managing director Bongiwe Kunene said higher provisions could be triggered if consumers can't keep up with payments following the relief period.
(This story corrects BASA managing director's name, title in final paragraph)
(Reporting by Emma Rumney; editing by Emelia Sithole-Matarise and David Evans)