Nedbank is warning that expropriating of land without compensation could trigger a banking crisis in South Africa.
Making a submission on Friday to Parliament’s joint constitutional review committee considering whether Section 25 of the Constitution should be amended, Nedbank CEO Mike Brown said the Constitution should not be used as a scapegoat for the lack of land reform.
Nedbank says it’s committed to supporting government in its land reform intentions.
But it says as one of the country’s big four banks, it also has a duty to warn of the consequences of wide-scale expropriation of land without compensation on the safety of depositors’ money.
Nedbank’s agricultural mortgage book currently stands at R17 billion.
Brown says the Constitution is not an impediment to land reform.
“Any material negative impact on property prices would adversely impact confidence on the banking system and could trigger a classical banking crisis.”
Brown says that uncertainty over government’s land expropriation plans is already negatively impacting the investment climate.