“We are nervous; incredibly nervous — the impact of this is likely to be far worse than the financial crisis of 2008.”
That was an off-the-record comment by a bank insider, who used the word “seismic” three times during our brief chat.
SA’s banks are issuing fairly cautious official responses to media questions about how they intend to deal with thousands of defaulting business and private clients as the Covid-19 pandemic fallout erodes or halts their income.
But privately they are clearly in crisis mode.
The Italian Banking Association, which represents 90% of banking assets in Italy, has said lenders would allow a pause in payments to help companies and households disrupted by the virus and the quarantine.
France’s president has suspended payment of taxes, rent, water, gas and electricity bills for companies during the coronavirus outbreak.
In SA, the DA on Tuesday urged banks and other South African financial institutions to freeze loan repayments by small businesses for at least four months to mitigate the impact of the virus on the economy.
As of March 13 2020, the coronavirus had infected more than 130,000 people and killed more than 4,700 worldwide. The symptoms of Covid-19 can be similar to those of the common cold or flu. Symptoms that warrant further testing include shortness of breath, a high persistent fever, and being unable to eat or drink.
The party also suggested that small, medium and micro enterprises be excused by their landlords from paying rent for their businesses.
SA’s banks are committing to more subtle forms of financial breaks for their clients, who are suffering huge income losses as a direct result of the pandemic.
Absa said while it was too soon to speculate about possible defaults, “we are looking at various possible scenarios and related actions that may become necessary should customers find themselves in financial difficulty”.
“We would like to heighten our call to our customers to approach us directly in the event of any form of uncertainty, including financial distress, during these unprecedented times.
Nedbank said it was mindful of the economic impact the Covid-19 pandemic was likely to have on its clients, “many of whom are already under pressure due to the country’s low levels of economic growth”.
“We will assess each case on its own merit and continue to be guided by our existing lending policies, which include a number of solutions designed to assist clients experiencing payment difficulties.”
These would include: tailored payment arrangements, allowing consumers to repay their arrears over time, restructuring of debts by means of term extensions and reduced instalments, and suspending or stopping legal action “under certain instances”.
“We encourage clients to contact the bank to provide assistance when in need.
“Due to the extraordinary times we currently operate in, we will also continue to engage with regulators and industry bodies, and be guided by what government is looking into in terms of a comprehensive set of measures to mitigate the expected impact of Covid-19 on the economy”.
The Covid-19 said the organisation was urgently consulting banking regulators and competition authorities to determine how best the banking industry could protect its customers, small businesses and staff from Covid-19 and its social and economic impact.
“While we are fully cognisant that the country is facing a crisis that demands an urgent response, we need to ensure that our actions are fair, legal, effective and sustainable for the duration of the pandemic, and afterwards.
“Any steps taken by the association or its member banks to alleviate the effects of the crisis will be detailed as soon as possible.”
With many countries around the world on lockdown over fears of the spread of the coronavirus, millions have either been placed in quarantine or are self-isolating. From Italians serenading each other from their balconies to patients dancing in China, here are some of the more entertaining ways in which people around the world are trying to beat the coronavirus blues.