Finweek English Edition - - INVESTMENT -

its cus­tomer base and then started cross sell­ing that ex­panded base with more prod­ucts. The lat­est re­sults showed this work­ing as planned, and the bank came out tops in the re­cent re­sults f lurry from the big four banks. But what struck me was the credit loss ra­tios we saw in the bank­ing re­sults, across the board they have been in­creas­ing. Con­sid­er­ing we’re cur­rently ex­pe­ri­enc­ing the low­est in­ter­est rates in some 40 years, one would not ex­pect th­ese num­bers to be ris­ing by as much as they did and it does add some fuel to the credit bub­ble fire, sug­gest­ing that banks have been re­lax­ing loan re­quire­ments in or­der to get the busi­ness – es­pe­cially in un­se­cured lend­ing. This is not a fire that’s go­ing to bring down any banks but one does won­der why a bank would lend more money when it fully ex­pects a sig­nif­i­cant por­tion of re­pay­ments not to be made. Is this really best busi­ness prac­tice? It doesn’t do home­loans nor any cor­po­rate deals, but it does charge higher rates and as such should be able to com­mand a higher p:e than the big four – as­sum­ing it can han­dle the bad debts.

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