South African Banks Still Losing on Home Loans

South African banks who posted their interim June reports showed that the mortgage market was still causing them headaches.

The three banks - Absa, Nedbank and Standard Bank - showed figures where it was seen that their home loan divisions kept their overall earnings down.

However, the silver lining was that these figures were lower than the same time period last year, meaning that there seems to be an improvement.

In terms of car loan services, Absa was the only bank that could show figures on the black side, with the other two landing in the red.

In terms of revenue, Absa and Nedbank earned 60% of their income from interest and 40% from transaction and service fees.

Standard Bank's split was more 50/50.

Absa announced that it would be increasing its fees this year in a bid to stay ahead of the competition.

The group said that transaction volumes had dropped from last year and hoped that this would pick up as the economy gets stronger.

Nedbank has managed to increase its client base significantly, following a campaign to offer loans and mortgages to consumers who have been turned away from other banks.

"Nedbank Retail celebrated a milestone during the period with the total retail client base exceeding five million clients," said the new CEO of Nedbank, Mike Brown.

9/17/2010 8:47:08 AM