The credit ratings of South Africa’s five largest banks were downgraded deeper into junk territory by Fitch Ratings. busrep
JOHANNESBURG - The credit ratings of South Africa’s five largest banks were downgraded deeper into junk territory by Fitch Ratings, which cited a deteriorating operating environment following the outbreak of the novel coronavirus.
Moody’s Investors Service also lowered its assessment on the lenders one notch to bring it into line with the sovereign, which was downgraded last week. The lenders face multiple challenges including “a decline in client activity, lower interest rates, which will put pressure on margins, and rising credit losses”.
Absa Group Ltd. had anticipated the risk of a sovereign-ratings downgrade and built up “substantial buffers to withstand significant stress scenarios”, the company said. “We remain confident that we have significant financial resources to remain resilient through the current crisis.”
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