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AFRICAN BANK LIMITED - Moodys affirms African Bank credit ratings, revises outlook

Release Date: 05/10/2012 15:33
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Moody’s affirms African Bank credit ratings, revises outlook

AFRICAN BANK INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registered bank controlling company)
(Registration number 1946/021193/06)
(Ordinary share code: ABL) (ISIN: ZAE000030060)
(Preference share code: ABLP) (ISIN: ZAE000065215)
(“ABIL”)

African Bank Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1975/002526/06)
Company code: BIABL
(“African Bank” or “the bank”)


MOODY’S AFFIRMS AFRICAN BANK CREDIT RATINGS, REVISES OUTLOOK

ABIL announces that Moody’s Investors Service (“Moody’s” or
“the agency”) affirmed all issuer ratings for African Bank
which included the banks’ global scale ratings of Baa2.

Moody’s revised African Bank’s outlook on senior debt and
deposit ratings to negative from stable.       The change in
outlook was prompted by the weakening of the South African
government’s credit profile, as captured by Moody’s downgrade
of South Africa’s government bond rating to Baa1 (negative)
from A3 (negative) on 27 September 2012. The outlook change
was not driven by a deterioration in the standalone financial
strength of African Bank.

The agency commented that the affirmed standalone credit
strength reflects the banks’ valuable niche franchise as South
Africa’s largest specialised unsecured credit provider and its
good   loss   absorption   capacity   underpinned  by   strong
profitability and a solid capitalisation cushion. Although the
agency noted the banks credit strength to be constrained by
its dependence on wholesale funding and the high credit risk
inherent in its client base, which leads to non performing
loans, the bank was expected to continue to benefit from its
focussed strategy, efficient operational structure and sound
credit risk management practices.

 The long-term senior unsecured debt ratings of Baa2 and
(P)Baa2 under its EMTN programme remain unaffected.      The
outlook was changed to negative from stable. The provisional
foreign- currency subordinated debt rating of (P)Ba1 (stable
outlook) under its EMTN programme remain unaffected.

The national-scale   issuer   ratings   of   A1.za/P-1.za remain
unaffected.

5 October 2012

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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