GCR expects weak performance across almost all corporate sectors to remain weak for the remainder of 2020 due to a collapse of consumer confidence. Expectations for a recovery are tempered by the rising number of business closures, removing critical productive capacity from the economy.
The criteria titled ‘Criteria for Fund Ratings’ predominantly applies to fixed income funds, including money market funds and other funds with portfolios that invest primarily in debt and debt like securities. Fund ratings (“f”) are not credit ratings. Therefore, they do not measure the relative ability of a fund to repay principal and/or interest in a timely manner. Rather, Fund Ratings indicate an opinion regarding the fund’s ability to preserve principal value under varying market conditions that may be affected by credit risk, interest rates, liquidity, as well as other market conditions.
Zimbabwe’s financial institution sector risk of ‘1’ is restrained by rising hyperinflation and the unquantified ramifications of the on-going COVID-19 pandemic posing major risks to the banking industry’s operations and performance
The Medical Schemes sector risk score (ranging from 0 to 15) is a key factor in the operating environment component. The core of the GCR Ratings Framework is based on GCR’s opinion that an entity’s operating environment largely frames its creditworthiness
GCR has updated its South African Corporate Sector Risk Scores taking into account the negative impact the COVID-19 disruptions have had to the local economic performance, with a view as to how each corporate sector will be affected.
GCR has published an industry research piece outlining the differences between issue(r) credit ratings and expected loss ratings, as well as the relationship between them. The research piece is aimed at giving a clear understanding of the different types of ratings and their application in the analysis of credit risk.
The onset of the Covid-19 pandemic has compounded an already strained operating environment and will have a negative impact on asset quality for the banking sector.
The Financial Institutions sector risk score (ranging from 0 to 15) is a key factor in the operating environment component score. The core of the GCR Ratings Framework is based on GCR’s opinion that an entity’s operating environment largely frames its creditworthiness. As a result, the operating environment analysis anchors the underlying risk score for the GCR rating methodology.
GCR takes three African banking hubs, from the South, East and West of the continent and provides an opinion on how the banking sectors will cope with this potential ‘annus horribilis’.
GCR combines elements of the country risk and sectoral risk analysis, blended across countries for entities operating across multiple jurisdictions, to anchor an insurer to its current operating conditions.