South Africa’s four largest banks — Absa, Nedbank, Standard Bank, and FirstRand (FNB) — are facing a massive R60 billion class action lawsuit from former homeowners. The plaintiffs claim their homes were repossessed and sold unlawfully for far less than market value, causing devastating financial losses.
This long-running legal battle, which started in 2017, is expected to come before the courts in February 2026. A key preliminary step will be for the court to decide whether to certify the class, which would allow the plaintiffs to sue collectively on behalf of thousands affected.
The case also names important state bodies including the National Credit Regulator (NCR), the Minister of Justice and Constitutional Development, and the South African Human Rights Commission. These institutions are implicated due to their regulatory and oversight roles.
The plaintiffs allege that the banks repossessed homes from account holders who had fallen behind on mortgage payments and auctioned the properties at rock-bottom prices, sometimes as low as R1,000. This was done without taking the homes’ actual market value into account.
Some of the affected homes were worth between R200,000 and R440,000. In one extreme example, a house valued at R1.3 million was reportedly sold for only a fraction of that amount. Many of these auctions took place before 2017, at a time when court rules allowed homes to be sold without a minimum or reserve price.
Advocate Douglas Shaw, who is representing the former homeowners, described the banks’ actions as “exploitative” and “deeply harmful.” He pointed out that despite legal reforms, banks continue to sell properties for 50% to 70% below their true value in many cases, while still demanding full repayment of the outstanding mortgage balance from borrowers.
Shaw also criticized banks for failing to treat foreclosure as a last resort as legally required. “We have seen homeowners who find new jobs, or want to rent or subdivide their property, yet the banks still push for immediate sales,” he said.
The claim totals R60 billion, representing the average loss in home equity suffered by families from over 100,000 repossessions since South Africa’s Constitution came into force in 1994. Many affected families have reportedly been homeless or destitute for years.
“This is about more than just money,” Shaw emphasized. “No one should accept that a person’s home can be sold for as little as R1000. The banks have caused real harm and they should compensate these people.”
The data supporting this case was initially collected at the request of the National Credit Regulator. However, Shaw noted that the NCR later tried to prevent public disclosure of some information, citing privacy laws such as the National Credit Act and the Protection of Personal Information Act.
In response to the lawsuit, Standard Bank said it is aware of the proceedings and is opposing the claims. The bank also noted that the R60 billion figure was not mentioned in court documents. “We conduct our banking practices in line with all regulatory and ethical standards and remain committed to treating clients fairly,” Standard Bank said.
Absa’s Managing Executive for Home Loans, Nondumiso Ncapai, affirmed that repossession is always a last resort. “Even after legal action begins, we allow customers time to catch up on arrears until the final auction,” she explained. Absa encourages customers facing difficulties to contact the bank for help.
Nedbank, while unable to comment extensively, confirmed that it is defending the lawsuit. “Class certification must be decided before the case can move forward,” the bank said. Nedbank also said it tries to avoid foreclosure by offering payment arrangements and loan restructuring tailored to individual circumstances.
First National Bank declined to comment, noting that the matter is sub judice, meaning it is currently before the courts.
South Africa’s housing crisis and the difficulty many face in keeping their homes have brought renewed attention to foreclosure practices. This landmark case could have far-reaching implications for homeowners, banks, and regulators alike.
