Johannesburg, 30 May 2014 — Global Credit Ratings has affirmed the national scale ratings assigned to ZB Bank Limited of BBB+(ZW) and A2(ZW) in the long term and short term respectively. In addition, Global Credit Ratings has also affirmed the national scale ratings assigned to ZB Building Society Limited of BBB-(ZW) and A3(ZW) in the long term and short term respectively. The Rating Watch on both entities’ ratings has been extended by a further 6 months, and thus, the validity of the ratings has similarly been extended to 11/2014.
SUMMARY RATING RATIONALE
Global Credit Ratings (“GCR”) has accorded the above credit rating(s) to ZB Bank Limited and ZB Building Society Limited based on the following key criteria:
ZB Bank Limited (“the Bank”) and ZB Building Society Limited (“the Society”) were placed on Rating Watch on the 11th of December 2013 and the 29th of November 2013 respectively, based on their parent’s (ZB Financial Holdings Limited) plans to merge these two entities, which would see the Society cease to exist as a separate legal entity and operate as a division within the bank. The information provided at the last review/s in 2013 put out a timeline of 1Q F14 for the completion of this process (which would have triggered a review of both entities’ published ratings). However, at the time of writing this announcement, the amalgamation process is still pending.
In light of this, the observation, or Rating Watch, period is extended for a further 6 months, after which a review of the remaining entity/s and its ratings will be conducted and communicated to the market.
The Bank will be taken off Rating Watch when the rating is upgraded, downgraded or affirmed, while the Society will be taken off Rating Watch once the rating has been withdrawn, upgraded, downgraded or affirmed by November 2014. It should be noted that the Rating Watch does not mean that a rating change is certain.
|ZB BANK LIMITED
||ZB BUILDING SOCIETY LIMITED
|NATIONAL SCALE RATINGS HISTORY
||NATIONAL SCALE RATINGS HISTORY
|Initial rating (Aug/2007)
||Initial rating (Dec/2002)
|Long term: A(ZW); Short term: A1-(ZW)
||Long term: BBB(ZW); Short term: A2(ZW)
|Rating Watch: Yes
||Rating Watch: Yes
|Last rating (Dec/2013)
||Last rating (Nov/2013)
|Long term: BBB+(ZW); Short term: A2(ZW)
||Long term: BBB-(ZW); Short term: A3(ZW)
|Rating Watch: Yes
||Rating Watch: Yes
Head: Financial Institution Ratings
Junior Credit Analyst
Head: Corporate Ratings
APPLICABLE METHODOLOGIES AND RELATED RESEARCH
Banking Criteria (updated April 2014)
Zimbabwe Bank Statistical Bulletin (2013)
Previous Rating Reports (up to 2013)
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SALIENT FEATURES OF ACCORDED RATINGS
GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument being rated; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument.
ZB Bank Limited and ZB Building Society Limited participated in the rating process via face-to-face management meetings, teleconferences and other written correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible.
The credit rating/s has been disclosed to ZB Bank Limited and ZB Building Society Limited with no contestation of the rating.
The ratings above were solicited by, or on behalf of, the rated client, and therefore, GCR has been compensated for the provision of the ratings.
CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.
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GCR affirms ZB Bank Limited’s rating of BBB+(ZW); Rating Watch and ZB Building Society Limited’s rating of BBB-(ZW); Rating Watch.