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Banks put brakes on lending as economy shrinks

The pain felt in South Africa’s economy in the first quarter was echoed in the banking industry.

The value of new consumer credit granted in the first quarter declined more than 10% to R121.6 billion ($8.9 billion) from the previous three months, according to data compiled by the National Credit Regulator. The number of applications for loans remained little changed at 10.48 million, it said in an emailed statement on Friday.

South Africa’s economy shrank the most in nine years in the first quarter, contracting by 2.2% compared with the prior three months, as output slumped at mines, factories and farms. Unemployment remained near a record high during the quarter at 26.7%. Even so, the number of impaired accounts declined to 19.4 million from 19.8 million at the end of December out of the 79.1 million that are active, the regulator said.

Source: Bloomberg

Other quarter-on-quarter highlights from the NCR:

New loans

Total outstanding consumer credit balances increased 1.3% from the previous quarter to take the gross debtors’ book to R1.78 trillion at the end of March, the NCR said.

Consumer Credit Balances

Private-sector credit growth slowed to 4.6% in May compared with a year earlier, the slowest pace since September 2010, according to data released by the Reserve Bank on Friday.

© 2018 Bloomberg

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There can be shared growth or no growth.

The ANC is killing any prospect of growth.

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