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· The rate of repossessions of cars by South Africa’s major banks is generally back to where it was before lockdown started in March, thanks to the end of relief measures from banks for struggling consumers,
· As the economy is still in struggling to come up terms with the challenges, there will be marked increase in repossessions. Several banks including Absa, Standard Bank, and Nedbank all reported that car loan arrears and impairments are rising
The rate of repossessions of cars by South Africa’s major banks is generally back to where it was before lockdown started in March, thanks to the end of relief measures from banks for struggling consumers. As the economy is still struggling to come up with the challenges, there will be marked increase in repossessions. Several banks including Absa, Standard Bank, and Nedbank all reported that car loan arrears and impairments are rising.
Absa reported that its vehicle and asset finance unit experienced impairments of R2.129 billion, up from R548 million in the first half of 2019. The bank’s credit loss ratio increased to 5% by the end of June from 1.4% at the end of June 2019. The bank provides finance to over 400,000 customers that have taken out R87.6 billion in car loans.
In the case of Standard Bank, car repossession rate increased from 0.25% to 0.32% of the value of the bank’s total car loan book. Nedbank, repossessing 1,200 cars per month before the national lockdown started. The level of repossessions was back there in July and August.
