Rating agency Standard & Poor’s (S&P) on Friday downgraded South Africa’s banks to non-investment grade, to fall in line with its rating of the country. Here is its full statement:
Ratings On Seven South African Financial Institutions Lowered Following Similar Action On Sovereign
• On April 3, 2017, S&P Global Ratings lowered its foreign currency ratings
• on South Africa to 'BB+/B' from 'BBB-/A-3'. The outlook is negative. We
• also lowered our national scale rating on South Africa to 'zaAA-' from
• We do not rate financial institutions in South Africa above the foreign
• currency sovereign ratings, due to the direct and indirect impact that a
• sovereign distress would have on banks' operations.
• As a result, we are lowering our ratings on FirstRand Bank Ltd.,
• FirstRand Ltd., Nedbank Ltd., Investec Bank Ltd., Absa Bank Ltd.,
• Barclays Africa Group Ltd., and BNP Paribas Personal Finance South Africa
• Ltd. (BNPPPF), and our rating on the domestic medium-term note program
• issued by BNP Paribas (acting through its local branch).
• The negative outlooks on the first four entities reflect that on the
• sovereign and indicate that we could lower the ratings further if we
• lower our foreign currency ratings on South Africa.
• The other three entities and the note program carry national scale
• ratings only, to which we do not assign outlooks.
JOHANNESBURG (S&P Global Ratings) April 5, 2017--S&P Global Ratings said today that it has lowered its ratings on five South Africa-based financial institutions and two related holding companies, as well as its national scale rating on the domestic medium-term note (MTN) program issued by BNP Paribas through its local branch.