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Johannesburg - In terms of lending, Standard Bank is leaving other banks in the shade.
In the current straitened economic conditions, Standard has expanded its lending while other banks have clamped down on advances.
The latest DI900 Reserve Bank data for August shows that the lending market is still subdued. Growth in advances at all banks was only 0.3% compared with July. Year on year (y/y) it was 1.8%, compared with 2% in July.
Consumer retail loans, including mortgages, credit cards and overdrawn facilities, rose 3.6% y/y compared with 4.2% in July. Growth in advances in the corporate sector continued the declining trend of -0.6% in July with -0.8% in August.
An analyst says banks are under great pressure to improve the quality of their loans in a market where bad debts have increased sharply. "This is because the current cost of capital is higher than the return."
In this environment Standard Bank is the only bank showing advances growth worth mentioning, although still from a low base. Its 4.7% increase y/y is low, but better than Nedbank's -3.4% and FirstRand's -0.3%.
The only category of advances showing some appreciation is mortgage loans. The average growth at all the banks was 3.1% for the month, compared with 6.2% in instalment finance and 2.3% for credit cards.
Nedbank was the biggest loser in terms of mortgages, because its market share dropped from 23.3% to 21.5% y/y. Standard Bank gained the most ground with a market share of 27.2% compared to 26.4% a year ago.
If this trend continues, Standard could soon dethrone Absa as the bank with the strongest market share in mortgages. Absa's currently has 29.8% of the market, compared to 29.2% a year ago. Its mortgage-loan market share was above 30% pre-2008.
Standard's focus on the home-loan market is ostensibly at the expense of riskier categories of advances like instalment finance, overdrafts and credit cards.
In the credit-card domain Standard, with its market share of 36%, is still the leader, but year-on-year growth was a negative 0.3%.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.