Johannesburg, 29 January 2016 – Global Credit Ratings (“GCR”) has upgraded the long term South African national scale (Rand) issuer rating of Bank Windhoek Limited to A+(ZA) with the outlook accorded as Stable. The national scale ratings assigned to Bank Windhoek Limited of AA(NA) and A1+(NA) in the long term and short term respectively have been affirmed, Stable outlook. Furthermore, the national scale ratings assigned to Bank Windhoek Holdings Limited of AA(NA) and A1+(NA) in the long term and short term respectively have also been affirmed, Stable outlook.
The upgrade of Bank Windhoek Limited’s South African national scale (Rand) issuer rating reflects a recalibration of the relative sovereign ratings of South Africa and Namibia. This recalibration follows the recent revision of the Republic of South Africa’s international scale local currency Issuer Default Rating (from ‘BBB+’ with a Negative outlook to ‘BBB’ with a Stable outlook), with the South African country ceiling simultaneously being lowered from ‘A-’ to ‘BBB’. Namibia’s long-term foreign and local currency Issuer Default Ratings have recently been affirmed at ‘BBB-’ and ‘BBB’, respectively, with Stable outlooks, while the Namibian country ceiling was downgraded to ‘BBB’ from ‘A’-.
The rating action taken does not reflect a change in key rating factors applicable to the credit profiles of Bank Windhoek Limited or Bank Windhoek Holdings Limited, barring the impact of sovereign risk. Rather, the ratings reflect changes in the relative sovereign risk of the South African and Namibian governments, as signalled by recent sovereign ratings actions.
GCR will continue to monitor developments related to the sovereigns and will respond to any impact on criteria and ratings.
|Long term South African National Scale (Rand) issuer Rating and Outlook|
|Bank||Last Rating Date||Previous LT Rating||Previous Outlook||New Rating Date||New LT Rating||New Outlook|
|Bank Windhoek Limited||Nov-15||A(ZA)||Stable||Jan-16||A+(ZA)||Stable|
The national scale ratings and outlooks have been affirmed:
|Long-term and Short-term National Scale Rating and Outlooks|
|Bank||Last/New Rating Date||Long-term rating||Short-term rating||Outlook|
|Bank Windhoek Limited||Nov-15/Jan-16||AA(NA)||A1+(NA)||Stable|
|Bank Windhoek Holdings Limited||Nov-15/Jan-16||AA(NA)||A1+(NA)||Stable|
NAMIBIAN NATIONAL SCALE RATINGS HISTORY SOUTH AFRICAN NATIONAL SCALE RATINGS HISTORY
Bank Windhoek Holdings Limited
Initial/last rating (November 2015)
Long-term: AA(NA); Short term: A1+(NA)
Rating outlook: Stable
|Bank Windhoek Limited|
|Initial rating (September 2005)||Initial rating (November 2013)|
|Long term: AA(NA); Short term: A1+(NA)||Long term: A-(ZA)|
|Outlook: Stable||Outlook: Stable|
|Last rating (November 2015)||Last rating (November 2015)|
|Long term: AA(NA); Short term: A1+(NA)||Long term: A(ZA)|
|Outlook: Stable||Outlook: Stable|
Sector Head: Financial Institution Ratings
APPLICABLE METHODOLOGIES AND RELATED RESEARCH
Global Criteria for Rating Banks and Other Financial Institutions, updated March 2015
BW rating reports (2005-14)
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. 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 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; and c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument.
Bank Windhoek Holdings Limited and Bank Windhoek 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 ratings have been disclosed to Bank Windhoek Holdings Limited and Bank Windhoek Limited with no contestation of the ratings.
The ratings above were solicited by, or on behalf of, Bank Windhoek Holdings Limited and Bank Windhoek Limited, and therefore, GCR has been compensated for the provision of the ratings.
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.|
|Credit Rating Agency||An entity that provides credit rating services.|
|Credit Risk||The possibility that a bond issuer or any other borrowers (including debtors/creditors) will default and fail to pay the principal and/or interest when due.|
|Creditworthiness||An assessment of a debtor’s ability to meet debt obligations.|
|Debt||An obligation to repay a sum of money. More specifically, it is funds passed from a creditor to a debtor in exchange for interest and a commitment to repay the principal in full on a specified date or over a specified period.|
|Default||Failure to meet the payment obligation of either interest or principal on a debt or bond. Technically, a borrower does not default, the initiative comes from the lender who declares that the borrower is in default.|
|Downgrade||The assignment of a lower credit rating to a company or sovereign borrower’s debt by a credit rating agency. Opposite of upgrade.|
|Financial Institution||An entity that focuses on dealing with financial transactions, such as investments, loans and deposits.|
|Long term||Not current; ordinarily more than one year.|
|National Scale Rating||The national scale 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.|
|Sovereign Risk||The risk of default by the government of a country on its obligations.|
GCR upgrades Bank Windhoek Limited’s long term South African national scale (Rand) issuer rating to A+(ZA); Outlook Stable