South African bank lending practices survey WP/2020/09

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. This survey also includes questions relating to the impact of COVID-19 and resulting lockdown regulations as well questions related to renewable energy.

As at the end of September 2020, the total domestic assets of the South African banking industry were approximately R5 546 billion. This was about R11 billion lower than the total balance sheet of the banks in March 2020 at R5 558 billion, reflecting the unprecedented growth in month-on-month lending for March 2020 of R258 billion. The most significant contribution was in derivative instruments where collectively R154 billion was added to the assets of the banking industry balance sheet.

As the impact of Covid-19 and the lockdown begins to inform the direction the economy is likely to take, there is a general preference towards household lending over lending to enterprises going forward. Households can expect a more stringent approach from the banks in the provision of credit for unsecured credit while mortgage lending and secured and motor vehicle finance being identified as the most favourable areas. Enterprise lending should see a substantial contraction in property finance going forward, with debtor finance another area of stringency.

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