{"id":318930,"date":"2019-05-24T07:00:47","date_gmt":"2019-05-24T05:00:47","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=318930"},"modified":"2019-05-24T07:00:47","modified_gmt":"2019-05-24T05:00:47","slug":"kganyago-says-banks-could-handle-potential-eskom-default","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/318930\/kganyago-says-banks-could-handle-potential-eskom-default\/","title":{"rendered":"Kganyago says banks could handle potential Eskom default"},"content":{"rendered":"
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South Africa\u2019s banking industry would be able to withstand a default by Eskom Holdings SOC Ltd. but the impact on pension funds is a concern for the central bank, Governor Lesetja Kganyago said.<\/p>\n

The power utility is laden with about $35 billion of debt, roughly equally divided into bonds and loans, according to data compiled by Bloomberg from public records, and is struggling to meet demand for electricity from aging and unreliable plants.<\/p>\n

\u201cWhat would a default of Eskom mean for the financial sector?\u201d Kganyago said to reporters in Pretoria on Thursday after announcing the latest interest-rate decision. \u201cWe stress-tested these things and the exposure of the financial sector to Eskom showed that the sector will be able to withstand this.\u201d<\/p>\n

Still, the possible negative effect on the wider market through bond holdings can\u2019t be ignored, Kganyago said.<\/p>\n

\u201cEskom is funded through the issuing of bonds rather than direct bank lending and with that issuance of bonds then the thing spreads to who owns the bonds and then you are into insurance companies, and you are into pension funds and it is that connectedness then that you start to worry about,\u201d he said. \u201cSuffice to say though that this is just a scenario, Eskom has not defaulted.\u201d<\/p>\n

President Cyril Ramaphosa has said that Eskom is \u2018 \u2018too big to fail.\u201d<\/p>\n

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Read: Repo rate unchanged as Reserve Bank sees lower growth for South Africa<\/a><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

South Africa\u2019s banking industry would be able to withstand a default by Eskom Holdings SOC Ltd. but the impact on pension funds is a concern for the central bank, Governor Lesetja Kganyago said.<\/p>\n","protected":false},"author":59,"featured_media":281403,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[1164,26],"class_list":["post-318930","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-eskom","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/318930","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=318930"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/318930\/revisions"}],"predecessor-version":[{"id":318932,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/318930\/revisions\/318932"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/281403"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=318930"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=318930"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=318930"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}