R699 car numbers shock

The official number attached to the controversial Satinsky R699 per month car scheme are much bigger than previously reported.

The scheme was initially thought to have been snapped up by approximately 17,000 South Africans – but according to official numbers from South Africa’s largest banks including Absa, Standard Bank and Nedbank, the scheme has in excess of 24,000 customers.

In reporting its results for the period ended June 2014, Absa revealed that its total exposure to the Satinsky car deal amounted to R700 million, covering just over 6,511 vehicles.

According to Moneyweb, Nedbank’s results for 6 months ended June 2014 showed an even greater level of exposure – R1.6 billion outstanding, with 14,000 clients attached to the group.

Standard Bank, South Africa’s biggest bank by market value and clients, told BusinessTech that it currently has 3,660 Satinsky customers on book, with a total exposure of R468 million.

“This group of accounts continue to perform well and in line with the broader portfolio,” the banking group said.

This means that approximately R2.8 billion in outstanding debt is being carried by 24,100 Satinsky customers across the banks involved – an average of R116,000 per customer.

Absa, Standard Bank and Nedbank’s vehicle finance arm were the only South African banks underwriting the scheme. WesBank avoided the group altogether, stating that it exhibited traits similar to a Ponzi scheme.

SA banks reported exposure to Satinsky

In June, Satinsky Group announced an abrupt end to an advertising partnership agreement with Hong Kong based advertising company Blue Lakes, which left many clients without the monthly advertising earnings they had become dependent on to finance the cars bought.

The breakdown of this business model had many angry consumers pointing fingers at the banks, claiming that the financial houses had been reckless in financing vehicles through Satinsky.

Consumers take action

On Thursday (7 August) the Eastern Cape High Court is set to rule on a case related to the R699 deals.

Court action is being brought by Johan Bartosch, who is leading a group of hundreds of disgruntled Satinsky consumers, looking to declare the contracts null and void in a class action suit against the banks.

The court will decide whether the bid meets the conditions to be handled as a class suit.

Both Absa and Standard Bank have hit back strongly against the court action, saying that the proposed class action is ill-defined and does not meet the requirements to be a class action suit.

More on the R699 car scandal

Absa’s R700 million exposure to R699 cars

Banks hit back in R699 car scheme

R699 car scheme heading to court

R699 cars deal is a scam: consumer activist