South African Banks Eye Unsecured Loans for Loss-Absorbing Funds
- Biggest banks collectively need up to $20 billion by end-2030
- Lenders expected to meet 60% of the requirement by end-2027
A resident looks out towards the skyline of the central business district in Johannesburg, South Africa.
Photographer: Michele Spatari/BloombergThis article is for subscribers only.
South Africa’s biggest banks, who must start issuing billions of rand next year for a new loss-absorbing class of debt, will partly get there by rolling unsecured liabilities into the proposed instrument, Moody’s Ratings said.
The central bank estimates South Africa’s six largest lenders will need to raise as much as 360 billion rand ($20 billion) by 2030 in the new tool, which is designed to allow the orderly resolution of a big bank that runs into trouble. They need to start raising the funds in January.