Financial Services Editor

MORTGAGE advances by South African banks grew 20,7% between January and November last year as consumers took advantage of low interest rates and invested in the property market.

A 32,1% increase in the price of residential property last year also increased the value of loans approved by banks.

November's DI900 returns, released by the Reserve Bank last week, show Standard Bank enjoyed most of the growth, increasing its total mortgage book by about 34,4% to R102bn. DI900s are the banks' individual balance sheets submitted monthly to the Reserve Bank.

Standard Bank now has a 25,6% share of the home loan market, up from about 22% in January and fast catching up with Absa, which grew its share of the market marginally to 31%, from 30,6% in January.

Measuring total banking assets, Standard Bank retained its lead against its peers, growing assets by 4,8% in November to R377,7bn, giving it a 25,4% market share.

Nedcor Group, which includes Peoples Bank, is second largest with R324,4bn or 21,8% of the market, followed by Absa with total assets of R301bn or 20,3% of the market. FirstRand remains the smallest of the big four, with total assets of R259bn, or 17,4% of the market.

Absa remains SA's largest mortgage lender, with total advances of R122,4bn, followed by Standard Bank with R102bn. Standard Bank is still the biggest credit card lender with loans totalling R6,7bn.

Low interest rates in the past two years have led to favourable conditions for banks, with bad debts at record lows and rising demand for credit. This has seen a 55% rise in the banks index on the JSE last year.

Jan 18 2005 07:11:07:000AM Stephen Gunnion Business Day 1st Edition