S&P lowers four South African banks

Standard & Poor’s said it lowered to BBB-/A-3 from BBB/A-2 the long- and short-term counterparty credit ratings on four South African banks.

The agency also affirmed the national scale ratings on these banks, including FirstRand Bank Ltd., Standard Bank of South Africa Ltd., Nedbank Ltd. and Investec Bank Ltd.

The outlook is stable.

S&P also said it also lowered the long- and short-term counterparty credit ratings on holding company FirstRand Ltd. to BB+/B from BBB-/A-3 and lowered the national scale ratings to zaA/zaA-1 from zaAA-/ZaA-1.

The downgrades follow the downgrade of the foreign-currency ratings on the Republic of South Africa, the agency said.

The downgrades on the banks are because S&P said it does not rate South African banks above the sovereign foreign-currency ratings on South Africa.

The agency said it expects lackluster GDP growth in the South Africa against a backdrop of relatively high current account deficits, rising general government debt and the potential volatility and cost of external financing.

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