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Cape Town - Johannesburg - Troubles at African Bank Investments [JSE:ABL] are unlikely to have much effect on bigger South African banks, the ratings agency Fitch said on Friday, days after a rival agency downgraded the four biggest banks.
Moody's cut ratings for Standard Bank, FirstRand, Nedbank and the local operation of Barclays Africa on concern the central bank would hesitate to protect creditors should the need arise.
The South African Reserve Bank (Sarb) announced a $1.6bn rescue package for the unsecured lender African Bank earlier this month.
READ: Moody's cuts ratings of four more top banks
The bank ran into problems as its target market of low-income earners struggled to keep up with loan repayments.
"The
recent failure and bail-in of African Bank Limited is isolated and any
contagion to the large South African banks is likely to be limited,"
Fitch said in a statement, adding it would not make any rating changes
for the big lenders.
Fitch has "bbb" range viability ratings for
the top five South African lenders, including Investec, but warns the
country's deteriorating economy may hurt their performance.
Rival Standard & Poor's also said on Thursday it had no plans to downgrade the South African banks.
Fitch
said the five big banks had only a small exposure to the systemically
insignificant Abil, as African Bank is more widely known.
They are, however, part of a consortium underwriting R10bn in new capital for Abil.
As part of its rescue package, Sarb acquired Abil's R17bn bad-loan book for R7bn and created a "good bank" worth R26bn.
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