| Wed 11 Mar 2009, 13:16 | | NED / NBKP - Nedbank - Credit rating action by Moody`s |
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NED NBKP
NED NBKP
NED / NBKP - Nedbank - Credit rating action by Moody`s
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" or "the group")
NEDBANK LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1951/000009/06
JSE share code: NBKP
ISIN: ZAE000043667
NEDBANK LIMITED - CREDIT RATING ACTION BY MOODY`S
Moody`s Investor Service has reviewed the global local currency (GLC) deposit
rating of Nedbank Limited (a wholly owned subsidiary of Nedbank Group) following
the recent downgrade of Old Mutual plc`s issuer rating and issued the media
release below on Nedbank Limited.
Nedbank Limited`s other ratings are not affected by this rating action.
NEDBANK LIMITED`S FINANCIAL POSITION
On 26 February 2009 Nedbank Group reported a solid profit for the year ended 31
December 2008, with basic earnings up 6,4% to R6 410 million and headline
earnings only marginally down by 2,6% to R5 765 million. The group increased its
net asset value 16% from 6 207 cents per share in 2007 to 7 179 cents in 2008.
The group`s statutory capital adequacy ratio increased strongly, with total
capital adequacy increasing from 11,4% to 12,4% and the group holds R9,5 billion
of surplus regulatory capital which we believe is appropriate at these times.
The group has shown resilience in the face of the challenges posed by the crisis
in global financial markets and the rapid slowdown in the domestic economy.
South African banks and the domestic financial system remain structurally sound,
but high interest rates and the global economic slowdown impacted earnings. In
this operating environment it is pleasing that the group has strengthened
capital ratios significantly and maintained earnings at a level similar to that
of last year. We have continued to grow net asset value, our liquidity remains
sound and the group`s risk management systems are proving effective in volatile
markets.
The full text of the results can be found on the Nedbank Group web site
www.nedbankgroup.co.za.
Nedbank Group Financial Director, Mike Brown said "given the group`s domestic
focus and small foreign-funding requirements (foreign deposits are only 1,3% of
total group deposits), although it is regrettable that the global currency
rating was downgraded by a single notch, this will have little impact on the
group`s funding and liquidity levels, which continue to remain sound".
MEDIA RELEASE BY MOODY`S
Moody`s downgrades GLC deposit rating of Nedbank (South Africa) to A1
Limassol, March 10, 2009 -- Moody`s Investors Service has today downgraded the
global local currency (GLC) deposit rating of Nedbank Limited ("Nedbank") by one
notch to A1 from Aa3. The outlook on the rating is stable. This downgrade is a
direct result of a recent downgrade of Old Mutual plc`s Issuer Rating to Baa1,
with a negative outlook, from A3. Nedbank Limited is a wholly owned subsidiary
of Nedbank Group, in which Old Mutual plc (via Old Mutual Life Assurance Company
(South Africa) Limited and associates) is the major shareholder with a 54.3%
stake.
"The recent downgrade of Old Mutual`s plc`s ratings suggests that its ability to
support Nedbank has been diminished. Hence, Nedbank`s GLC deposit rating no
longer benefits from a one-notch rating uplift because of parental support,"
says Constantinos Kypreos, a Limassol-based Moody`s Vice President-Senior
Analyst.
According to Moody`s, Nedbank`s GLC deposit rating is currently based on its
Bank Financial Strength Rating (BFSR) of C, which translates into a Baseline
Credit Assessment (BCA) of A3, and on Moody`s assessment of a very high
probability of systemic support in the event of need. The bank therefore
continues to receive a two-notch uplift from its BCA because of systemic
support, bringing the GLC rating to A1.
As a result of this rating action, Moody`s has also downgraded Nedbank`s hybrid
debt instruments issued under its ZAR15 billion Domestic Medium Term Note (DMTN)
programme by one notch to Aa3.za from Aa2.za, and changed the outlook on any
subordinated and junior subordinated notes issued under its US$2 billion euro
medium-term note (EMTN) programme to stable from positive, as these ratings are
no longer constrained by the relevant country ceilings. The bank`s other ratings
- as follows - are not affected by this rating action: the C BFSR with a stable
outlook; its national scale issuer rating of Aa1.za; the senior debt ratings
(issued under the bank`s US$2.0 billion EMTN programme), which are capped by the
A2 country ceiling for foreign currency debt; and the long-term foreign currency
deposit rating of Baa1 with a positive outlook.
The last rating action on Nedbank`s GLC deposit rating was implemented in May
2007 when the rating was upgraded to Aa3 from A1.
The principal methodologies used in rating this issuer are "Bank Financial
Strength Ratings: Global Methodology" (February 2007), and "Incorporation of
Joint-Default Analysis into Moody`s Bank Ratings: A Refined Methodology" (March
2007). These can be found at www.moodys.com in the Credit Policy & Methodologies
directory, in the Ratings Methodologies sub-directory. Other methodologies and
factors that may have been considered in the process of rating this issuer can
also be found in the Credit Policy & Methodologies directory.
Headquartered in Johannesburg, South Africa, Nedbank Limited reported total
assets of ZAR547 billion (US$79.8 billion) as of December 2008.
Limassol
Constantinos Kypreos
Vice President - Senior Analyst
Financial Institutions Group
Moody`s Investors Service Cyprus Limited
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Limassol
Mardig Haladjian
General Manager
Financial Institutions Group
Moody`s Investors Service Cyprus Limited
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Sandton
11 March 2009
For further information please contact:
Mike Brown (Chief Financial Officer),
tel: +27 (0)11 294 9999, email: mikeb@nedbank.co.za
Markus Borner (Nedbank Group Capital Management),
tel: +27 (0)11 295 8616, email: markusb@nedbank.co.za
Don Bowden (Tier 1 Investor Relations)
tel: +27 (0)21 702 3102, email: don@tier1ir.co.za
Sponsors to Nedbank Group in South Africa:
Merrill Lynch South Africa (Pty) Limited
Nedbank Capital
Sponsor to Nedbank Group in Namibia:
Old Mutual Investment Services (Namibia) (Pty) Ltd
Sponsors to Nedbank Limited:
Investec Bank Limited
Nedbank Capital
Date: 11/03/2009 13:16:02 Produced by the JSE SENS Department.
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