Global credit ratings agency Fitch Ratings has changed the outlooks on Absa Bank (ASA), Investec Bank (INL) and Nedbank (NED) and their respective holding companies to Negative from Stable, following Monday's revision to the Outlook on South Africa's sovereign Long-term foreign currency Issuer Default Rating (IDR) of 'BBB+'.

Fitch said in a statement released late on Monday that the Outlook change reflects a deteriorating macro-economic environment and its anticipated impact on the financial performance and financial position of the banks.

The global credit crisis is expected to lead to lower levels of activity within the domestic economy, which is likely to add to the challenges already faced by the banking sector due to the continuation of high interest rates and record-levels of consumer indebtedness.

The rating action has not affected The Standard Bank of South Africa (SBK), which was placed on Negative Outlook on 4 August 08, and FirstRand Bank (FSR) and its holding company FirstRand Bank Holdings, both of which were downgraded on 19 September 08 and are now on Stable Outlook. The rating actions reflect growing concerns about the operating environment, Fitch said.

The Long-term IDRs of Absa Group and Absa Bank are at South Africa's Country Ceiling 'A', reflecting the majority ownership by Barclays Bank Plc, and the very high probability of support that arises as a result of the latter's 58.8 percent ownership.

The Negative Outlook to Absa's and Absa Bank's Long-term IDRs reflects the downward pressure on South Africa's Country Ceiling.

AFP

RSS
Digg
de.li.cious
facebook