Moody's downgrades South Africas five biggest banks.

By bne IntelliNews March 1, 2012
Moody's Investors Service said it has downgraded by one notch the senior debt and deposit ratings of South Africas five largest banks, reflecting the impact of the country's increasingly constrained public finances and the agencys view that authorities would face challenging policy choices if multiple institutions were to need its financial support at the same time. The banks downgraded include the big four banks Standard Bank, Absa Bank, FirstRand Bank and Nedbank, as well as Investec Bank. The downgrade is not driven by deterioration in the standalone financial strength or the financial performance of the five banks, Moodys noted. It added that the reduced capacity of South African authorities to provide support to financial institutions if needed stems was one of the reasons for the downgrade of its outlook on South Africa's A3 rating to negative from stable in November 2011. Moody's also believes that the five largest South African banks are systemically important institutions for the country's payment system, and that authorities would be willing to support them if required, the agency said in a statement. Moreover, Moodys downgraded African Banks provisional foreign-currency subordinated debt rating to Ba1 from Baa3.
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