South Africans are making overdrafts again, new data shows – but not much compared to 2020


  • South African banks have R20 billion less in overdrafts and credit cards on their books than a year ago, according to data released Tuesday by the SA Reserve Bank.
  • Combined overdrafts of all banks are larger than they were in November, but still down 8.1% year-on-year.
  • Meanwhile, “bad loans” (an indicator of bad debts) at South African banks now stand at R67 billion more than a year ago.
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At the end of January, the books of South African banks showed a combined overdraft and credit card debt of R20 billion less than at the same time in 2020, data released by the SA showed on Tuesday. Reserve Bank’s Prudential Authority.

The overdrafts are bigger than they were in November, when they fell to 197 billion rand. But at R209 billion, they were still down 8.1% from January 2020, when news of a new coronavirus detected in China was just starting to gain attention.

Credit card advances also remain low, around R 1 billion less than a year ago, at R 132 billion.

On the other side of the coin, statistics suggested that South Africans were clinging to cash.

Compared to a year ago, current account balances increased by 31.5%, savings accounts increased by 18.3% and current accounts increased by 19.1%.

Between these three types of deposits, South Africans held around 500 billion rand in accessible cash, up from just over one trillion rand at the end of January 2020.

At the same time, loans against which the banks levied specific write-downs increased by 67 billion rand and were rapidly approaching 240 billion rand.

When the scale of the pandemic started to become clear in April 2020, the Prudential Authority told banks to keep cash rather than paying dividends and bonuses to executives – they would thus be better placed to finance hard-hit consumers and businesses.

But a gigantic government-backed loan guarantee program was called a complete failure, with banks say their customers did not come looking for money.

(Compiled by Phillip de Wet)

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