Fitch cuts ratings on South Africas major banks following sovereign downgrade.

By bne IntelliNews January 16, 2013
Fitch Ratings has lowered by one notch the viability ratings of South Africas five biggest banks - Absa Bank, FirstRand Bank, Standard Bank, Nedbank, and Investec Bank and also the long-term foreign currency Issuer Default Rating (IDR) of four of the banks (excluding Absa) following the recent downgrade of the South African sovereign rating to BBB from BBB+. The ratings agency explained that the downgrades reflect the five major banks' concentration to South Africa, a high proportion of liquid assets invested in government securities and a weakening operating environment as indicated by the sovereign downgrade. The viability ratings of FirstRand, Nedbank, Standard Bank and Absa were downgraded to bbb, while Investec's is one notch lower at bbb-. The long-term IDRs of FirstRand, Nedbank and Standard Bank were cut to BBB from BBB+ and Investec's IDR was lowered to BBB- from BBB. Absas long-term IDR was affirmed at A-, as it is driven by the ratings of its 55.5%-owner, UK-based Barclays Bank (A/Stable), as Fitch considers Absa as being a strategically important subsidiary. The National Ratings of the major banking groups, excluding Absa, were affirmed, while Absa's National Long-term ratings have been upgraded to AAA(zaf).

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