Bank said in a voluntary trading update for the nine months ended September 2020, that the medium-term budget policy statement, delivered this week. SA’s debt trajectory is, however, substantially worse than reflected in the Supplementary Budget. The MTBPS reiterates the need to make difficult choices to stabilize debt, stressing that failing to do so could lead to a fiscal crisis. The fiscal policy path presented will be a further drag on SA’s recovery, with higher taxes and spending constraints likely to weigh on incomes, earnings and growth.
While these are very challenging times, we are well prepared to respond to and manage the risks that have emerged. The group remains profitable and capital and liquidity ratios are strong and above board approved minimum targets and well above all regulatory requirements. Retail loan applications are back to pre-lockdown levels for all the bank’s major products. This is because of “pent up” demand during the lockdown on home loans and vehicle finance, the South African Reserve Bank (SARB) lowering the interest rate by 300 basis points. The gross loans and advances grew from 1% in the first half of 2020 to 3% in retail and business banking. The growth of gross banking loan and advances in corporate and investment banking slowed from the 10% reported in the first half of 2020 as clients accessed committed liquidity facilities during the peak of the pandemic.