Fitch upgrades Nedbank rating, affirms four other major South African banks.

By bne IntelliNews July 23, 2012
Fitch Ratings has upgraded the ratings of South African banking group Nedbank Group and its wholly owned subsidiary Nedbank, saying that the entities' credit profiles have converged with peers. The viability ratings of Nedbank Group and Nedbank were raised to bbb+ from bbb, and the long-term issuer default ratings (IDRs) of both entities were upgraded to BBB+ from BBB. At the same time, Fitch affirmed the ratings of the other four major South African banks, citing a trend of improving asset quality, lengthening funding profiles and acceptable capital levels. The agency pointed at the banks resilient earnings, saying none of South Africas five major banks reported losses throughout the financial crisis, with returns-on-equity dropping to around 12% at the lowest point in the cycle. Fitch affirmed the foreign currency IDRs of Absa Group and Absa Bank at A- with stable outlook in line with the ratings of its 55.5%-owner, British Barclays Bank (A/Stable). The IDRs of FirstRand Bank and those of Standard Bank were affirmed at BBB+, while Investecs ratings were affirmed at BBB. The outlooks on the IDRs of the four biggest banks, except for Absa, are negative, reflecting their potential vulnerability to weakening of asset quality, long-term earnings in an uncertain economic environment and a reduction in capital, Fitch said.

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