Announcements

GCR amends outlooks on select international scale ratings of South African financial institutions

GCR amends outlooks on select international scale ratings of South African financial institutions

Johannesburg, 14 December 2016 – Global Credit Ratings (“GCR”) has changed the outlooks on the international scale local currency ratings of selected South African banks and non-bank financial institutions, following a revision of the mapping tables which are used in according international scale local currency ratings to issuers/companies rated in South Africa.

RATING RATIONALE

The updated mapping table follows a recent revision of the outlook on the Republic of South Africa’s sovereign ratings from ‘Stable’ to ‘Negative’, as well as minor mapping recalibrations in the BBB and BBB- international scale local currency rating bands. The mapping table specifies the international scale local currency ratings that have been accorded to each South African national scale rating for entities/issues that have both of these ratings.

It should be noted, however, that the rating actions taken do not reflect a change in key rating factors applicable to the credit profiles of the issuers/companies listed below, barring the impact of changes in the outlook for sovereign risk. The ratings primarily reflect minor changes in the mapping between South African national scale and international scale, local currency ratings, as well as the outlook on the sovereign rating being changed from ‘Stable to ‘Negative’.

GCR will continue to monitor developments related to the sovereign rating and will respond to any impact on its mapping tables and ratings.

Rating action on the following entities’ long-term (“LT”) international scale local currency outlooks was taken:

*Unsolicited/Public information ratings.

The national scale ratings and outlooks of the following entities remain unchanged:

*Unsolicited/Public information ratings.

ANALYTICAL CONTACTS

Primary Analyst

Omega Collocott

Sector Head: Financial Institution RatingsTitle2

(011) 784 – 1771Telephone2

omegac@globalratings.netEmail2

Committee Chairperson

Marc Chadwick

Sector Head: Insurance Ratings

(011) 784 – 1771

chadwick@globalratings.net

APPLICABLE METHODOLOGIES AND RELATED RESEARCH

GCR’s Global Criteria for Rating Banks and Other Financial Institutions, updated March 2016

GCR’s South African Mapping Table, updated December 2016

GCR’s Rating Announcement of 9 December 2016, entitled: ‘Global Credit Ratings updates mapping table for South Africa’.

RATING LIMITATIONS AND DISCLAIMERS

ALL GCR’S CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://GLOBALRATINGS.NET/UNDERSTANDING-RATINGS. IN ADDITION, GCR’S RATING SCALES AND DEFINITIONS ARE ALSO AVAILABLE FOR DOWNLOAD AT THE FOLLOWING LINK: HTTP://GLOBALRATINGS.NET/RATINGS-INFO/RATING-SCALES-DEFINITIONS. GCR’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, PUBLICATION TERMS AND CONDITIONS AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE AT HTTP://GLOBALRATINGS.NET.

SALIENT FEATURES OF ACCORDED RATINGS

GCR affirms that a.) no part of the ratings was influenced by any other business activities of the credit rating agency; b.) the ratings were based solely on the merits of the rated entity, security or financial instrument being rated; c.) such ratings were an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the ratings is for a maximum of 12 months, or earlier as indicated by the applicable credit rating document.

The credit ratings have been disclosed to the issuers/companies listed above with no contestation of the ratings.

The ratings above are a combination of solicited and unsolicited ratings. In the case of solicited ratings, GCR has been compensated for the provision of the ratings. In the case of unsolicited ratings, the ratings are accorded based on publicly available information, and are provided for public information purposes.

GLOSSARY OF TERMS/ACRONYMS USED IN THIS DOCUMENT AS PER GCR’S FINANCIAL INSTITUTIONS GLOSSARY

Credit Rating An opinion regarding the creditworthiness of an entity, a security or financial instrument, or an issuer of securities or financial instruments, using an established and defined ranking system of rating categories.
Financial Institution An entity that focuses on dealing with financial transactions, such as investments, loans and deposits.
International Scale Rating LC International local currency (International LC) ratings measure the likelihood of repayment in the currency of the jurisdiction in which the issuer is domiciled. Therefore, the rating does not take into account the possibility that it will not be able to convert local currency into foreign currency or make transfers between sovereign jurisdictions.
Long-Term Not current; ordinarily more than one year.
Long-Term Rating Reflects an issuer’s ability to meet its financial obligations over the following three to five year period, including interest payments and debt redemptions. This encompasses an evaluation of the organisation’s current financial position, as well as how the position may change in the future with regard to meeting longer term financial obligations.
National Scale Rating Provides a relative measure of creditworthiness for rated entities only within the country concerned. Under this rating scale, a ‘AAA’ long term national scale rating will typically be assigned to the lowest relative risk within that country, which in most cases will be the sovereign state.
Risk The chance of future uncertainty (i.e. deviation from expected earnings or an expected outcome) that will have an impact on objectives.
Short-Term Current; ordinarily less than one year.
Short-Term Rating An opinion of an issuer’s ability to meet all financial obligations over the upcoming 12 month period, including interest payments and debt redemptions.
Sovereign Risk The risk of default by the government of a country on its obligations.

For a detailed glossary of terms utilised in this announcement please click here

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ALL GCR CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS, TERMS OF USE OF SUCH RATINGS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS, TERMS OF USE AND DISCLAIMERS BY FOLLOWING THIS LINK:HTTP://GCRRATINGS.COM. IN ADDITION, RATING SCALES AND DEFINITIONS ARE AVAILABLE ON GCR’S PUBLIC WEB SITE AT WWW.GCRRATINGS.COM/RATING_INFORMATION. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. GCR's CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THIS SITE.

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