A 240% increase to R2.24 billion in credit impairment charges on loans and advances. Resulting in a credit loss ratio of 11.1%.
Major Bank’s Credit Impairments:
One of South Africa’s largest banks by customer count saw an 80% rise in credit impairments. The impairments jumped from R3.5 billion in 2022 to R6.4 billion in FY2023.
Economic Turmoil and Debt Levels:
Economic turmoil in FY2023 has severely impacted financial stability.
Middle-class debt levels are extremely high, with 79% of income going towards debt instalments.

These figures suggest a challenging environment for both financial institutions and individuals in South Africa. The sharp rise in impairment charges and credit loss ratios can be attributed to increased defaults and financial distress among borrowers, likely due to economic hardships such as unemployment, inflation, and reduced disposable income.

For 2024, the forecast appears bleak with continued financial strain expected on the middle class and possibly other segments of society. It will be crucial for both banks and policymakers to navigate these challenges carefully to stabilize the financial system and support economic recovery.