In 2024, South Africa’s major banks are projected to face R74 billion in losses from non-performing loans, exacerbated by rising living costs and persistently high interest rates. S&P Ratings highlights this trend with Absa’s credit impairments up 13.4% to R15.5 billion for the year ended 31 December 2023, reflecting broader sector challenges. Similarly, Standard Bank experienced a 22% hike in credit impairments to R16.3 billion, exacerbated by a lack of credit recovery from 2022’s payment holidays. FNB also saw its impairment charges climb by 31%. Across the sector, S&P anticipates a maintained credit loss ratio above 0.75%, averaging 1.4% for 2024 due to persistent economic challenges. This forecast includes a cautious 5% credit growth, partly offset by targeted lending to the renewable energy sector.
