South African Reserve Bank data story says corporate credit surge was driven mainly by financial sector borrowing rather than the real economy

The South African Reserve Bank published a data story in its June Quarterly Bulletin showing that the sharp rise in corporate credit over the previous 12 months was driven primarily by borrowing from financial corporates rather than by lending into the productive economy. Corporate credit growth accelerated from 5.1% in February 2025 to 13.2% in February 2026, with credit to the financial sector rising 23% over the period, compared with 4.4% growth for non-financial corporates. The publication said lending to non-financial corporates is typically linked to direct investment and working capital in sectors such as construction, mining and agriculture, especially during project construction and commissioning. By contrast, borrowing by financial corporates was tied largely to equity market gains and funding needs within bank holding companies and group securities and trading entities. Short-term demand was also linked to stronger appetite for South African government bonds and mining-related stocks, while longer-term growth reflected anticipated Basel III implementation and the need for financial institutions to build capital buffers. Overall, the Reserve Bank concluded that the increase in corporate credit mainly reflected regulatory requirements, market conditions and balance sheet restructuring in the financial sector, with less of the additional borrowing flowing to the real economy.