Moody's rates Mercantile Bank A2.za

Moody's Investors Service said it assigned to Mercantile Bank Ltd. of South Africa a national long-term rating of A2.za and a short-term rating of prime-1.za.

The ratings reflect the bank's improved financial profile, niche franchise, recovering financial fundamentals and implied parental support from Caixa Geral de Depositos, which owns 92% of the bank, Moody's said.

Rating concerns include the mismatches in the maturity profile of the bank's assets and liabilities, high credit concentrations and challenging operating conditions, the agency said. A further challenge for the bank will be to expand its franchise in a highly competitive market, Moody's added.

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