S. African Stocks Drop Most in Month as Banks Fall on Debt Woes

South African stocks fell, the third-worst performing equity market globally, after the nation’s largest provider of unsecured loans increased bad-debt write-offs, hurting other lenders and retailers.

The 166-member FTSE/JSE Africa All-Share Index (JALSH) declined as much as 1.6 percent, the biggest intraday decrease since April 17. The gauge was trading 1.3 percent lower at 40,894.72 by 1:22 p.m. in Johannesburg. The six-member FTSE/JSE Africa Banks Index slid as much as 4.1 percent, the most in three years. The FTSE/JSE Africa General Retailers Index fell 4.3 percent.

African Bank Investments Ltd. (ABL) plunged as much as 25 percent, the most on an intraday basis since August 1998, to its lowest level in eight years. It was last trading 18 percent down at 17.35 rand. The lender, which also owns a furniture retailer, wrote down 445 million rand ($47 million) of bad loans and cut its first-half dividend by 71 percent, saying collections of non-performing loans will be difficult during the rest of its fiscal year.

Capitec Bank Holdings Ltd. (CPI), the second-largest unsecured lender, dropped 4.3 percent to 191.40 rand. Absa Group Ltd. (ASA), which is majority controlled by Barclays Plc, slid 3.7 percent to 147.24 rand. Standard Bank Group Ltd. (SBK), the continent’s largest lender, declined 2.2 percent to 111.30 rand.

JD Group Ltd., the largest publicly traded furniture retailer, slid 5.6 percent to 30.99 rand, heading for its lowest closing price since March 2009. Truworths International Holdings Ltd. (TRU), the country’s biggest clothing retailer, slipped 4.6 percent to 88 rand.

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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