| Fri 16 Jul 2010, 12:22 | | NED/NBKP - Nedbank Group Limited/Nedbank Limited - Fitch Affirms Nedbank`s |
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NED NBKP
NED NBKP
NED/NBKP - Nedbank Group Limited/Nedbank Limited - Fitch Affirms Nedbank`s
Ratings
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 LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1951/000009/06
JSE share code: NBKP
ISIN: ZAE000043667
NEDBANK GROUP - FITCH AFFIRMS NEDBANK`S RATINGS
Fitch Ratings has today affirmed the Long-term Issuer Default ratings (IDR) of
Nedbank Group Limited (Nedbank Group) and its 100%-owned subsidiary, Nedbank
Limited (Nedbank), at `BBB`. The full list of the ratings follows below.
The ratings of Nedbank Group and Nedbank factor in the bank`s asset quality and
financial performance which deteriorated during 2009 in a challenging operating
environment, leading to higher retail impairments and lower endowment earnings.
They also reflect the bank`s intrinsic strength through a well-established and
growing domestic franchise and improved levels of Tier 1 capital.
The resilience of Nedbank Group`s franchise saw its 2009 pre-impairment
operating profit 2.5% higher than in 2008. Nedbank Group expects 2010 earnings
to be modestly higher than 2009 due to the improving economic environment.
Nedbank Group`s asset quality continued to deteriorate in 2009 with the bank
reporting a non-performing loan (NPL) ratio of 6% at FYE09 up from 4% at end-
2008 - a 56.3% increase in the absolute amount of NPLs. Nedbank Group`s coverage
ratio was low at 36.2% at end-2009, compared with 45.4% at end-2008, which was
attributable to an increased proportion of home loans in NPLs. Deterioration in
the bank`s asset quality indicators has started to slow in 2010 although,
according to management, the risk of defaults in the wholesale environment
remains.
Interest rate risk and foreign-exchange risk are low and appear well managed.
Liquidity risk within Nedbank is mitigated by a stable deposit base, reflecting
the strength of its franchise. Nedbank Group`s Tier 1 capital adequacy ratio
improved to 11.4% at Q110 up from 9.6% at end-2008. Fitch considers Nedbank
Group`s Tier 1 capital to be acceptable given current levels of core
profitability and expected medium-term growth.
Nedbank Group is South Africa`s fourth-largest banking group. Nedbank is the
group`s primary operating subsidiary and comprises five core business clusters -
Nedbank Capital, Nedbank Corporate, Nedbank Retail, Nedbank Business Banking,
Nedbank Wealth and its wholly owned subsidiary, Imperial Bank Limited. The group
is 52.2%-owned by Old Mutual Life Assurance Company (South Africa) Limited and
its associate companies.
Nedbank Group
Long-term foreign currency IDR: affirmed at `BBB`; Outlook Stable
Short-term foreign currency IDR: affirmed at `F2`
Long-term local currency IDR: affirmed at `BBB`;
Outlook Stable
Individual Rating: affirmed at `C`
Support Rating: affirmed at `2`
National Long-term Rating: affirmed at `AA-(zaf)`; Outlook Stable
National Short-term Rating: affirmed at `F1+(zaf)`
Nedbank
Long-term foreign currency IDR: affirmed at `BBB`; Outlook Stable
Short-term foreign currency IDR: affirmed at `F2`
Long-term local currency IDR: affirmed at `BBB`;
Outlook Stable
Individual Rating: affirmed at `C`
Support Rating: affirmed at `2`
National Long-term Rating: affirmed at `AA-(zaf)`; Outlook Stable
National Short-term Rating: affirmed at `F1+(zaf)`
Sandton
16 July 2010
For further information please contact:
Trevor Adams (Nedbank Group Executive, Balance Sheet Management), tel: +27 (0)11
294 1141, email: trevoradams@nedbank.co.za
Michael Davis (Nedbank Group General Manager: Balance Sheet Management - Head:
Group Asset, Liability & Capital Management), tel: +27 (0)11 295 7282, email:
michaeldav@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: 16/07/2010 12:22:01 Produced by the JSE SENS Department.
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