The South African Bank Lending Practices Survey, measures lending sentiment of senior credit practitioners across the banking industry and continues with its three themes of household lending, enterprise lending and the strategic direction of banks.
During the six months to March 2020, new domestic lending of approximately R330 billion had been created, almost R100 billion more than the previous period ending September 2019. The banks indicated a shift away from household lending in favour of enterprise lending in the previous survey and the current data confirms the shift in strategic direction, with banks’ lending 15% (R49 billion) to households and 21% (R69 billion) to enterprises with a further 0.1% (R289 million) to SMEs.
Enterprises, particularly those borrowing for property finance, were allocated R20 billion of the R49 billion, an emerging trend, with household mortgages still retaining the largest allocation at R25 billion of the new loans allocated to households of R49 billion.
The strategic direction of bank lending during Covid-19 remains challenging with sentiment towards both enterprises and households declining materially.