Credit loss ratios have fallen from 2023, provisioning pressures have eased, and lenders have maintained conservative impairment buffers despite improving conditions.
South Africa's largest banks say conditions in the credit market have improved, helped by tighter lending standards and better-performing loan books.
That is one of the key findings from BDO, South Africa’s latest Tier 1 Banking Report, which found that non-performing loans peaked in the second half of 2024 and have since stabilised, while credit loss ratios have moved back towards normal levels.
“The credit cycle has definitively turned,” said Kevin Hoff, BDO South Africa’s director and banking sector lead for financial services.
According to the June report, consumers had benefited from cooling inflation and the onset of rate cuts, contributing to lower credit costs and creating more room for future credit extension.
