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FNB reeling from consumers who just can’t cope

by | Sep 14, 2020 | Personal Finance

FirstRand Bank has posted a huge drop in headline earnings for the year ended June 2020. This reflects a truly challenging trading environment which was brought on by the Covid-19 pandemic and subsequent lockdown.
“In addition, post the beginning of lockdown in March 2020, underlying customer income and affordability in all segments deteriorated sharply, as evidenced by lower levels of underlying transactional and credit turnover, and in the amount of debt relief requested by customers, resulting in increased arrears and non-performing loans,” the financial group said.
Profit for the year was 36% lower than in 2019, at R19 billion.
Rand Merchant Bank’s earnings took a 58% hit, with vehicle finance group WesBank falling 53%.

Covid impact

“The Covid-19 pandemic is a once in a generation event and has had a profound impact on the world. In South Africa it resulted in the deepest GDP contraction since the Second World War. The lockdown devastated the economy and it will be a long hard road back to recovery,” said chief executive officer, Allan Pullinger.
The group noted a sharp increase in the number of customers applying for debt relief as a result of the Covid-19 pandemic
Retail customers were the most affected, making up 674,300 of accounts.

Economic activity in South Africa is expected to start it’s uptick soon. This is mainly because of the easing of lockdown restrictions.
However, this might not be enough to repair the damage done to personal and business finances.

People are skipping debt repayments and debt collectors are back to their harassing ways. If you are permanently employed, yet struggling with your debt payments and/or not having enough money available for your everyday living expenses like food, electricity and transport – then you should consider the process of debt review. It can definitely ease your financial burden and offer you peace of mind about your finances.

You are not alone. You have rights and you have options. Debt counselling may not be for everyone, but if could be your saving grace. Please enter your details into our contact form, and one of our advisors will gladly be in touch.

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