Absa Group, the South African bank controlled by Barclays Plc, said it may appeal a charge of “reckless lending” handed down by the Port Elizabeth Magistrate’s Court.

About 20 months ago, Absa agreed to lend an unidentified 81-year-old client R350 000 to help his daughter’s business, Louis von Zeuner, deputy chief executive of the bank, said. The daughter stood surety and was a guarantor on the loan, he said.

“Now it appears her business didn’t do what was expected,” Von Zeuner said. “We will have to see if this is something we want to appeal or accept.”

The court ruled that the loan agreement be set aside, cancelling the outstanding R374 000 owed to Absa, said Gaynor de Kock, a debt counsellor at Debt Smart, which is acting with law firm Pierre Kitching on behalf of the pensioner. Absa was prosecuted under South Africa’s 2007 National Credit Act, which bolsters consumer protection by tightening lending controls.

“They really need to consider who they give loans because this person had been turned down by two other banks because he couldn’t afford the loan,” said de Kock.

The bank tried to repossess the man’s home when he defaulted on monthly repayments that exceeded his income, The Herald reported earlier today. The ruling may be the first of its kind, the Port Elizabeth-based newspaper said.