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NED
NED
NED - Press Release: Fitch Upgrades Nedbank`s Long-term IDR to `BBB+`
NEDBANK GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06
JSE share code: NED
NSX share code: NBK
ISIN: ZAE000004875
("Nedbank Group")
Press Release: Fitch Upgrades Nedbank`s Long-term IDR to `BBB+`
Fitch Ratings-Johannesburg/London-19 June 2007: Fitch Ratings has today upgraded
Nedbank Limited`s ("Nedbank") Long-term Foreign Currency Issuer Default Rating
("IDR") to `BBB+` from `BBB`. Following the upgrade, the Outlook is now Stable.
The Short-term Foreign Currency IDR is upgraded to `F2` from `F3`. Both
Nedbank`s and parent Nedbank Group Limited`s ("Nedbank Group") Individual
ratings are also upgraded to `B/C` from `C`. The other ratings are affirmed as
listed below.
The upgrades reflect considerable improvements in Nedbank`s and Nedbank Group`s
financial performance and efficiency ratios and a well established domestic
franchise. The ratings also reflect strong credit growth and the potential
pressure on cost/income ratios as a result of significant branch expansion
plans.
The group`s operating profits improved 44.5% during FY06 as a result of higher
levels of net interest and fee and commission income, coupled with well-
controlled cost increases. This caused the bank`s efficiency ratio to improve to
60.5% at FYE06 (FYE05: 66.4%).
Nedbank Group`s gross loans and advances expanded 25.3% to ZAR296.3bn at FYE06
(FY05 growth: 18%). As a result, asset quality ratios improved during the year,
with an impaired loans ratio of 2.60% at FYE06 (FYE05: 2.97%). The group`s
coverage ratio is considered to be low at 68.7% at FYE06 (FYE05: 75.1%). Tier 1
capital adequacy ratios were 8.3% and 7.9% at FYE06 for Nedbank Group and
Nedbank respectively.
Nedbank has three core operating divisions - Nedbank Corporate, Nedbank Retail
and Nedbank Capital. The group is 50.95%-owned by Old Mutual and its
subsidiaries.
Nedbank Group
Long-term Foreign Currency Issuer Default affirmed at `BBB`, Outlook Stable
Long-term Local Currency Issuer Default affirmed at `BBB`, Outlook Stable
Short-term Foreign Currency Issuer Default affirmed at `F3`
National Long-term affirmed at `A+(zaf)`, Outlook Stable
National Short-term affirmed at `F1(zaf)`
Individual upgraded to `B/C` from `C`
Support affirmed at `2`
Nedbank
Long-term Foreign Currency Issuer Default upgraded to `BBB+` from `BBB`, Outlook
now Stable
Long-term Local Currency Issuer Default affirmed at `BBB+`, Outlook Stable
Short-term Foreign Currency Issuer Default upgraded to `F2` from `F3`
National Long-term affirmed at `AA-(AA minus)(zaf)`, Outlook Stable
National Short-term affirmed at `F1+(zaf)`
Individual upgraded to `B/C` from `C`
Support affirmed at `2`
Contact: Denzil de Bie, Anthony Walker, Johannesburg, +27 11 516 4900.
Fitch`s rating definitions and the terms of use of such ratings are available on
the agency`s public site, www.fitchratings.com. Published ratings, criteria and
methodologies are available from this site, at all times. Fitch`s code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the `Code of
Conduct` section of this site.
19 June 2007
Date: 19/06/2007 12:16:52 Produced by the JSE SENS Department.
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