South African Banks Fall on Growth Concerns: Johannesburg Mover

South African bank stocks fell to the lowest in nearly six months on concern a slowing economy could hamper loan repayments.

The FTSE/JSE Africa Banks Index dropped as much as 2.4 percent and was trading 2.2 percent weaker as of 2:06 p.m. in Johannesburg. FirstRand Ltd. led declines, falling 3.7 percent to 28.60 rand, followed by Capitec Bank Holdings Ltd. which slid

2.7 percent to 181.80 rand. The six-member index has fallen 7.7 percent this year.

Africa’s largest economy expanded at the slowest pace since a 2009 recession in the three months through March, as growth eased to an annualized 0.9 percent compared with 2.1 percent the previous quarter, according to data released by Statistics South Africa on May 28. That missed growth of 1.6 percent economists were expecting, sending the rand down to a four-year low.

“Consumers will be under pressure which could impact loan repayments,” Stephen Meintjes, head of research at stockbroker Imara S.P. Reid in Johannesburg, said in a phone interview. Concerns about labor unrest, foreign selling and rand weakness, which may cause gasoline prices to rise, are also impacting banks, he said.

Capitec, South Africa’s second-largest provider of unsecured loans, Nedbank Group Ltd. and Standard Bank Group Ltd said this month bad debts are starting to rise. Stellenbosch-based Capitec also faces a regulatory fine over alleged contraventions of credit laws, the company said in a statement yesterday.

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