Business lending showing further signs of strain
Business lending showed further signs of strain in May as other loans and advances to businesses recorded a third consecutive month of annual decline, reinforcing concerns that weakness in corporate credit is becoming structural rather than temporary, according to analysis by Almandro Jansen of Simonis Storm Securities.
CHAMWE KAIRA
Business lending showed further signs of strain in May as other loans and advances to businesses recorded a third consecutive month of annual decline, reinforcing concerns that weakness in corporate credit is becoming structural rather than temporary, according to analysis by Almandro Jansen of Simonis Storm Securities.
Business other loans and advances contracted by 2.4% year-on-year in May, worsening from a 1% decline in April after growing by 3.3% in March.
Although the loan book increased by N$237.3 million during the month to N$20.2 billion, Jansen noted that the annual decline partly reflects a high base from a year ago.
However, the four-month trend increasingly points to structural weakness, particularly in the commercial and services sectors.
Overall business credit growth slowed to 4.4% in May from 5.5% in April, a deceleration of 110 basis points that returned the annual growth rate to its March level.
