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Big Banks to Remain Unaffected
| News by Staff ReporterSA’s big banks have said no major change will take place as a result of Fitch’s revision
South Africa’s big banks yesterday said the decision by Fitch Ratings to revise SA’s rating from stable to negative would not immediately affect them.On Friday Fitch revised SA’s BBB+ rating from stable to negative, citing “limited progress on some long-standing structural issues,” as the reason. (Read more here.)
Mike Brown, CEO of Nedbank, said, “In the global economy SA is vulnerable to weaknesses in our key trading partners, particularly Europe, where a large percentage of our exports still go. Fortunately we have low levels of debt to GDP (around 40%). So while not ideal, the impact of negative ratings outlooks or single notch downgrades is less material.”
Louis von Zeuner, deputy CEO of Absa, said for the time being there would be no major effect on SA banks.
“The message is less about the cyclical downturn or global threat but more about the importance to deal with the bigger issues and to deliver on them,” he said.
“Rather than speculate whether a negative outlook can eventually move to a downgrade, the private sector and government must work together to get SA working better. So in my view here is a strong message to SA, but possibly not something that for now will have a major banking impact,” he added.
Source: www.bizpremises.co.za
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