ABSA BANK LIMITED - BAGL/ BIABS - Rating Assigned by Moody's Investor Services

BAGL/ BIABS - Rating Assigned by Moody's Investor Services

BARCLAYS AFRICA GROUP LIMITED
(Incorporated with limited liability in South Africa under registration number 1986/003934/06)
Bond Issuer Code: BAGL
(“Barclays Africa Group” or “BAGL”)

ABSA BANK LIMITED
(Incorporated with limited liability in South Africa under registration number 1986/004794/06)
Bond Issuer Code: BIABS
(“Absa Bank”)

BARCLAYS AFRICA GROUP LIMITED AND ABSA BANK LIMITED: CREDIT RATING ACTIONS BY
S&P GLOBAL RATINGS AND BY MOODY’S INVESTOR SERVICES

Notice is hereby given in terms of the Debt Listings Requirements of the JSE Limited that:

    -   Moody’s Investor Services (‘Moody’s) on 28 November 2017 placed the ratings of Absa Bank
        and BAGL on review for a downgrade, as part of its rating action on five South African Banks
        following similar action on the South African Sovereign, which was placed on review for a
        downgrade on 24 November 2017.

    -   S&P Global Ratings (S&P) on 29 November 2017 downgraded the ratings of Absa Bank and
        BAGL, as part of its ratings action on eight South African financial institutions following similar
        action on the South African Sovereign, which was downgraded on 24 November 2017.

S&P do not rate financial institutions above the foreign currency rating of the sovereign, as in their view
there are likely to be direct and indirect influences of sovereign distress on domestic banks’ operations,
including their ability to service foreign currency obligations. Accordingly, S&P lowered the national scale
ratings on Absa Bank and Barclays Africa Group as part of this ratings action.

S&P lowered BAGL’s national scale rating to 'zaBBB+ from 'zaA-’, and Absa Bank’s national scale rating
to 'zaAA-' from 'zaAA'. The four-notch differential between BAGL and Absa is inherent in S&P’s rating
methodology where non-operating holding companies of banks are structurally subordinated to the
operating bank. S&P affirmed the short-term national scale rating of BAGL ‘at zaA-2’ and that of Absa at
'zaA-1+'.

S&P noted the following in respect of the performance of South African banks during the first half of
2017: “Despite the operating environment, the South African Banking sector’s performance has
outperformed our expectations”. S&P also stated the following in respect of the funding position of South
African banks: “the major banks are not exposed to large-scale refinancing risk or a reversal of investor
sentiment, thanks to their lack of exposure to international funding. This is an important differentiator to
other emerging market banking sectors”.

Additional details are contained in the press releases issued by Moody’s and S&P respectively:

    -   ‘Moody’s places on Review for Downgrade the Ratings of five South African Banks’.

    -   ‘Ratings on Eight South African Financial Institutions Lowered Following Similar Ratings Action
        On Sovereign’.

A sovereign rating downgrade has been anticipated for some time, and BAGL has taken steps to prepare
for it. This includes conducting regular stress tests to ensure that our capital and liquidity positions
remain robust subsequent to a stress event such as a sovereign ratings downgrade.
Johannesburg

30 November 2017



Debt sponsor to Barclays Africa Group and Absa Bank Limited:
Corporate and Investment Bank, a division of Absa Bank Limited

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