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NEDBANK LIMITED - Credit Ratings Actions by Standard and Poor's and Moody's

Release Date: 06/04/2017 08:00
Code(s): NBKP     PDF:  
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Credit Ratings Actions by Standard and Poor's and Moody's

NEDBANK LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1951/000009/06
JSE share code: NBKP
ISIN: ZAE000043667
(“Nedbank”)

CREDIT RATINGS ACTIONS BY STANDARD AND POOR’S AND MOODY’S

Shareholders and noteholders are referred to the press releases issued by Moody’s on 4
April 2017 and by Standard and Poor’s on 5 April 2017.

Following the executive changes initiated by President Zuma on Friday, 31 March 2017, on
Monday, 3 April 2017, credit ratings agencies, Standard & Poor’s downgraded the South
African (SA) sovereign credit rating and Moody’s placed the credit ratings of the SA
government under review for downgrade.

SA banks' ratings are constrained by the SA sovereign credit rating and any changes to the
SA sovereign credit ratings are automatically reflected in the credit ratings of SA banks.
Given this, SA bank ratings, including Nedbank’s, were placed under ratings review by
Moody’s and lowered in line with the sovereign rating by Standard & Poor’s.

Specific ratings action by Standard & Poor’s on Nedbank:

   -   Long- and short-term counterparty credit ratings lowered to 'BB+/B' from 'BBB-/A-3'
   -   Long-term local national scale rating lowered to 'zaA' from 'zaAA-'.
   -   Short-term local national scale rating affirmed at 'zaA-1'.

These ratings actions reflect Standard and Poor’s assessment of the SA sovereign and
banking industry as a whole and are not specific to Nedbank. Standard & Poor’s stated in
their announcement that: “The lowering of the ratings on South Africa reflects our view that
political and institutional stability in the country has weakened. Amid slow economic growth
and political wrangling, the South African banks have been performing resiliently, however.
The negative outlook on Nedbank Ltd reflects that on the sovereign. We would lower the
ratings on the bank or revise the outlook to stable should there be a similar action on the
sovereign. Outside a sovereign action, we see positive or negative rating actions on the
bank as a remote possibility in the next 12 months”.

Nedbank Group, CEO, Mike Brown, noted: “Despite the downgrade, we must remember that
Nedbank is operating in a South African banking system that is sound and well-capitalised.
When we announced our financial results in February 2017, our results showed that
Nedbank is in very good shape and we are well prepared to deal with the volatility that a
sovereign downgrade to sub-investment grade brings. We have strong capital and liquidity
levels and our plans for 2017 are in place and include robust stress testing. This means that
we have the strategies, people and balance sheet strength to work our way through the
difficult environment in South Africa”.

Sandton
6 April 2017

Sponsors to Nedbank Limited:
Nedbank CIB
Investec Bank Limited

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