ABIL announces that Moody’s Investors Service (“Moody’s” or “the Agency”) has affirmed African Bank’s global senior debt and deposit ratings of Baa3/Prime-3 and local national scale issuer ratings of A2.za/P-1.za. The outlook for the ratings was changed to negative from stable.
Moody’s said that African Bank originated credit has remained within their expectation and was not the driver for this change in outlook. The Agency however indicated a concern that, based on ABIL’s interim results released in May 2013, asset quality on furniture-related credit may deteriorate more than they had initially anticipated. This, together with potentially weakening profitability on the back of lower yields and increasing provisioning requirements precipitated a downgrade in their outlook for African Bank. The Bank’s high capital levels continued to support the current ratings.
Commenting on the outlook downgrade Leon Kirkinis, ABIL’s chief executive, noted that, “the Bank was confident that it has already implemented the necessary risk reduction measures and has continued to strengthen the provisioning buffers, to maintain and grow the business on a healthy and sustainable basis”.
