Read on Twitter
Here's a quick breakdown of the different areas of a bank. Brother Vusi is an investment banking guy & invests in properties. Definitely worth a follow. https://twitter.com/SlwaneToYou/status/1266070686046568448
Tagging @SlwaneToYou onto the replies so you can shoot burning questions.
Between him & I hopefully we can help out
Between him & I hopefully we can help out
When interest rates are low (like now), banks need to extend their loan books to make the some levels of cash
Bank X lent out R100 at 10%. They made R10 in interest.
Now Bank X has to lend out R100 at 7%. They only make R7 in interest.
The bank needs to "make up" this R3
Bank X lent out R100 at 10%. They made R10 in interest.
Now Bank X has to lend out R100 at 7%. They only make R7 in interest.
The bank needs to "make up" this R3
This is why you may have been getting phone calls from the bank saying...
"Hey, don't you want another loan? Interest rates are really low..."
It makes sense for banks to reach out to their better credit rated clients first and try reduce some of the default risk.
"Hey, don't you want another loan? Interest rates are really low..."
It makes sense for banks to reach out to their better credit rated clients first and try reduce some of the default risk.
