Investec bad debts remain high

Johannesburg - The chief executive of Investec [JSE:INL] said on Friday bad debts remain high and the central bank should further cut interest rates to boost the economy.

Stephen Koseff, CEO of the investment bank and asset manager, said the environment was still difficult as economic activity remained relatively low following a recession.

"I still think we're in quite a tough type of climate," Koseff told Reuters Insider in an interview.

"(Impairments) will still be at elevated levels but below what we experienced over the last two years."

South African banks have all been hit by higher bad debts at their retail and corporate units as customers - feeling the effects from the recession and grappling with job losses - struggle to pay back loans.

Africa's biggest economy exited its first recession in nearly two decades last year, but recent data suggest the pace of recovery may be faltering, even after a series of interest rate cuts.

Investec, which is also listed in London, reported a small rise in annual profit in May but said it remained concerned over nagging bad debts.

"Economic levels of activity are still low and therefore we should cut (interest) rates," Koseff said.

South Africa's manufacturing output growth slowed year-on-year in May, data showed on Thursday, leaving open the possibility of another interest rate cut later this month

- Reuters