AFRICAN BANK INVESTMENTS LIMITED - Moodys downgrades African Banks global and local credit ratings

Moody’s downgrades African Bank’s global and local credit ratings

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”)
and
AFRICAN BANK LIMITED
(Incorporated in the Republic of South Africa)
(Registered bank)
(Registration number 1975/002526/06)
Company code: BIABL
(“African Bank”)

MOODY’S DOWNGRADES AFRICAN BANK’S GLOBAL AND LOCAL CREDIT RATINGS

ABIL announces that Moody’s Investors Service (“Moody’s” or “the agency”) has, on the 4th of March 2013,
downgraded African Bank Limited’s global senior debt and deposit ratings by one notch to Baa3/Prime-3,
from Baa2/Prime-2. Concurrently, African Bank’s local national scale issuer ratings were also adjusted to
A2.za/P-1.za from A1.za/P-1.za. All ratings now carry a stable outlook. This follows the rating action in
October 2012, where Moody’s changed African Bank’s outlook to negative in line with the negative sovereign
rating outlook and the downgrade of the South Africa’s government bond rating.

This rating action reflects Moody’s assessment of the risks associated with the continued challenging
operational conditions in South Africa’s unsecured lending market, which African Bank has communicated to
the market from August 2012. In addition, Moody’s also noted African Bank’s concentrated wholesale
funding profile, notwithstanding the gradual increased diversification over the past few years.

The stable outlook on African Bank’s rating reflects Moody’s view that the impact will be partially contained
by management’s proactive approach in tightening underwriting standards over the past 18 months. The
stable outlook is further supported by African Bank’s robust loss-absorption capacity, as demonstrated by its
capital buffers and its earnings-generating capabilities.

Leon Kirkinis, ABIL’s managing director, said “African Bank deploys extremely conservative funding and risk
management measures to its liability portfolio and we view the term wholesale funding as a strength and the
more recent diversification into foreign markets is a step in reducing concentration. The robust and
sustainable business model will continue to deliver high returns, through market cycles. Notwithstanding the
downgrade, African Bank maintains its global investment grade rating, with a stable outlook.”


Midrand
05 March 2013

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

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