Booysen said the impairment ratios would increase by 140 per cent in the next six months to about N$5 billion because chances were that the current economic conditions were going to continue.

He said impairment charges had most affected Absa's retail bank division.

Nedbank said in its interim results presentation recently that impairment charges for the six months to June had increased by 86,4 per cent - from N$1 billion in the previous corresponding period to N$1.8 billion.

High inflation, personal indebtedness and increases in interest rates have put consumers under severe strain.

The erosion of consumers' ability to repay debt has led to the continued deterioration of the retail lending environment.

Nedbank said this had placed significant pressure on retail banking, which was expected to continue for the remainder of the year and into next year.

Booysen said: "It is not only interest rates, but we are beginning to see an increase in job losses."

Rudi Dicks, the executive director of the National Labour and Economic Development Institute (Naledi), confirmed that people were beginning to lose jobs as a result of South Africa's economic downturn.

"Some are cashing in on their retirement funds and plan to return to the labour market later, when things are better," Dicks said.

He added that the current economic slowdown was the worst since 2001.

Booysen made these comments after Alliance Group reported that the number of homeowners who were at least one month in arrears on their mortgage repayments would have more than doubled to 55 000 between January and September.

Wesbank, a subsidiary of First National Bank, said car repossessions had surged 75 per cent in the past 12 months.

Meanwhile, Absa recently won a licence to open a bank in Namibia, Booysen said.

He told guests at a presentation that Absa planned to boost retail businesses in Tanzania, Angola and Mozambique, while it planned acquisitions where its controlling shareholder, Barclays, operated.

Bloomberg reported that Absa planned to open an office in Nigeria.

The bank said revenue had increased 21,3 per cent while earnings for retail banking operations had fallen seven per cent.

But there was 19,2 percent growth in customer deposits.

Business Report

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