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Interest rate impact on loan books

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Do furniture retailers and microlenders increase margins when interest rates increase? I know their bad debt ratios will likely increase, but will their margins increase as well? Also, are there any industries that benifit directly from an interest rate hike?
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Super Contributor
Bad debt ratio will drecrease. Remember you have to present value your bad debt book when interest rate increase. An example is say BAd debt book equal R100, and interest rate is 10%, Present value of bad debt book will be R90.90 ,when interest rate increase to 11% then Bad debt book will be R90.09. Part 2, Interest rate increase margin increase and you have more leverage to price in risk. Just my 2c worth.
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Super Contributor
priced in already..see latest standard bank research...companies that benifit form interest rate hikes include banks...also food retailers benfit from inflation which is the real issue. Also they are always going to have cash flows so in tough times go defensive with food retailers and fast moving consumables.
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