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Land expropriation could shake South African banking industry, Nedbank warns

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Land expropriation could shake South African banking industry, Nedbank warns

South Africa's Nedbank Ltd. cautioned that the planned amendment of the country's constitution to allow the expropriation of land without compensation could impact property prices and trigger a banking crisis, Reuters reported Sept. 7.

President Cyril Ramaphosa revealed on Aug. 1 that the ruling African National Congress party intended to tweak laws such that the expropriation without compensation could take place, as whites still owned most of the nation's territory 24 years after the end of apartheid in 1994.

Nedbank CEO Mike Brown told the Constitutional Review Committee that there was no need to change the law as the existing legislation already let the government expropriate property for land reforms.

"As a commercial bank, we are a key role player in funding the economy and any material impact to property prices would adversely affect confidence in the banking system and could trigger a classic banking crisis with significant negative knock-on effects on the economy," the report quoted Brown as saying.