Bad debts are threatening a seizure in SA’s lending system. First it was Absa. After reassuring the market at the end of 2012 that there was no problem with its bad debt and no need to increase its relatively modest provisioning, three months later it had to make available R1,35 bn to cover newly discovered mortgage debt. This led to earnings falling 9% for 2012. Two weeks ago African Bank shocked investors with a warning of extensive new provisions for worse-than-expected bad debt emanating from its unsecured lending business.