Ratings agency Standard & Poor’s said on Thursday it had no plans to downgrade South African banks, easing concerns a cut by Moody’s on the country’s four biggest lenders this week could have a knock-on ratings impact.<\/p>\n
Moody’s on Tuesday downgraded deposit ratings for Standard Bank, FirstRand, Nedbank and Absa Bank — Barclays Africa Group’s local operation.<\/p>\n
The move, which was criticised by South Africa’s central bank and some analysts, was the latest blow to Africa’s most developed economy and sent banking shares lower.<\/p>\n
Some economists said the decision by Moody’s could lead to further downgrades but S&P, which cut South Africa’s sovereign credit rating in June, said it had no plans to follow suit.<\/p>\n
“At the moment they (banks) are on a stable outlook and we’ve got no plans in the immediate future to change the ratings on institutions outside an economic shock or an industry-wide shock,” S&P credit analyst Matthew Pirnie told Reuters.<\/p>\n
The decision by Moody’s followed the collapse this month of a much smaller lender, African Bank, which needed a $1.6 billion bailout from the South African Reserve Bank (SARB).<\/p>\n
The ratings firm said SARB had limited the risk of contagion but showed it was willing to impose loses on creditors.<\/p>\n
Pirnie at S&P said it made its ratings decisions on South African banks using a different measure to Moody’s.<\/p>\n
“In a long time we have not placed government support into the ratings of South African banks because … the banks are pretty good in comparison to the country they operate in,” Pirnie said.<\/p>\n
“We don’t believe that the African Bank failure poses a systemic risk, therefore we wouldn’t move down specifically because of that,” he added.<\/p>\n
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