Johannesburg – First National Bank (FNB) will maintain its prime lending rate at 10.5% following the decision earlier taken today by the South African Reserve Bank (SARB) Monetary Policy Committee to leave rates unchanged until the final MPC meeting for 2016 on 24 November.
The decision applies to all prime-linked accounts.
“We are seeing a gradual recovery in business activity from a sharp contraction earlier in the year,” says FNB CEO Jacques Celliers.
“Consumers, however, remain extremely cautious and low
levels of confidence are restraining growth. We have seen an
impressive growth in savings placed at FNB showing a high level
of resilience in these tough times.”
Yet, while activity remains at this low point, there are clear
opportunities for expansion in sectors benefiting from currency
weakness and lower prices such as property and tourism,” adds Mr
“This period of stable interest rates offers indebted consumers an
ideal opportunity to reduce their lending and create greater
personal financial stability. We continue to see stable credit health
across our consumer and business sectors; indicating that the
majority of customers are weathering current tough conditions. I
urge those customers experiencing difficulty to approach their
bank to restructure loans rather than defaulting,” Says Mr Celliers
Says Sizwe Nxedlana, Chief Economist at FNB;
“The SARB’s decision to keep rates on hold comes as very little surprise given the weak economic growth backdrop and an inflation outlook that
is likely to improve. While GDP surprised on the upside in 2Q16 leading indicators suggests that growth in 3Q16 will be softer. Headline inflation has persistently surprised to the downside and does not look set to move meaningfully above 6% for the year as a whole.
Furthermore, underlying inflationary pressures have
remained contained with core inflation averaging 5.5% year to
date. The early parts of 2017 should see headline inflation rate return comfortably within the SARB’s target range. The rand exchange rate has remained relatively stable over the past few months, this combined with the downturn in international agricultural commodity prices as well as
easy global monetary policy conditions suggests that the central
bank may have reached the peak of its hiking cycle,” adds Mr
Nxedlana Consumer Information.
FNB offers assistance in the form of a Debt Remedy facility from
FNB Home Loans and a Special Repayment Arrangement offered
by FNB Card. FNB’s Investment Product House conducts weekly
rates review meetings at which rates earned on non-prime linked
investments are reviewed independently of the SARB’s MPC
announcements. Revised rates are communicated via rates boards
in branches and on FNB’s web site, www.fnb.co.za