First National Bank (FNB) CEO Jacques Cilliers has said in an interview that the bank is ‘not positioning’ itself for ‘unnecessary disruptions and risk’ arising from the government’s drive to implement a policy of expropriation without compensation (EWC).
In an interview with Jackie Cameron of BizNews, Cilliers said a lack of certainty was the main problem.
‘It would be nice if we could have some certainty about policy. Policy in itself is not the problem. The problem is if there’s no certainty in policy. But at the moment, we’re not positioning ourselves for unnecessary disruptions and risk.’
He added: ‘It obviously does have an impact on valuations, because the market needs certainty before they really expand.’
Overall, ‘we’ve got comfort that the right things will happen’ and FNB would ‘facilitate and play our part to try and support that outcome’.
‘It’s a very well-documented, industry-wide conversation. We are monitoring and we’ve made our comments. We are part of all the dialogue with the authorities.’ Chiefly, what FNB was ‘looking for is just certainty in policy. Then we can all … move on’.
He said the bank did not ‘see (EWC) as a major impact on that ultimate driver of how we do banking in the agricultural world of property rights’. He added: ‘I think there would be elements of environments where an adjustment will be needed and we could facilitate those.’
‘We don’t see it as a major deterrent in how we lend. Our criteria is quite stringent and focused on leveraging the actual asset. But very importantly, when we originate credit, we do so into cash flow activities. It’s the same with your mortgage. We wouldn’t want to come and take your house from you.’