Statement by A2 Banks
10 February 2002
The South African financial institutions named by the Fitch Ratings
announcement on Friday 8 February 2002 welcome the retraction issued by
Fitch today.
Fitch Ratings issued a "negative watch" on six A2 banks on Friday.
The retraction follows an invitation to Fitch by the six banks to satisfy
itself about the liquidity of the institutions concerned. Fitch met today
with each of the institutions, used the opportunity to satisfy itself as to
their liquidity positions, and came to the conclusion that all the banks
named are able to meet their obligations. This opportunity was not afforded
to the named institutions before the statement was issued last Friday. In
addition, there is no reason to assume that the banks would be negatively
affected by developments at Saambou Bank. None of the institutions have
exposure to Saambou.
The institutions met this afternoon with the Registrar of Banks, Mr Christo
Wiese, and informed him that the "watch negative" rating was being
retracted.
Mr Wiese welcomed this decision.
Issued by:
African Bank Limited
African Merchant Bank
Brait Merchant Bank
Corpcapital Bank
PSG Investment Bank Holdings Ltd
PSG Investment Bank Ltd
FITCH RATINGS REMOVES NEGATIVE WATCH FOR SIX SOUTH AFRICAN FINANCIAL
INSTITUTIONS AND AFFIRMS RATINGS
Fitch Ratings - Johannesburg/London - 10 February 2002: Fitch Ratings, the
international rating agency, has removed its negative watch and affirmed the
National Long- and Short-term ratings of the following financial
institutions: (African Bank Limited ÝBBB+ (zaf), F2 (zaf)¨; African Merchant
Bank ÝBBB+ (zaf), F2 (zaf)¨; Brait Merchant Bank ÝBBB (zaf), F2 (zaf)¨;
Corpcapital Bank ÝBBB (zaf), F2 (zaf)¨; PSG Investment Bank Holdings Ltd
ÝBBB (zaf), F2 (zaf)¨; and PSG Investment Bank Ltd ÝBBB (zaf), F2 (zaf)¨.)
Fitch's analysis of the banks' standalone liquidity positions and policies
indicates that these remain sound, and consistent with what the agency would
expect from banks at this rating level. Banks' management have also
confirmed that none have direct credit exposure to Saambou. Consequently the
agency believes that these banks are currently in a position to meet their
contractual obligations. While these banks have not had to seek liquidity
the agency gain additional comfort from the stated stance of the South
African Reserve Bank (`SARB') of offering liquidity to banks in a solvent
position in a normal course of business.
The removal of the negative watch follows a review of the respective bank's
liquidity and solvency positions over the weekend following the rating
downgrade of Saambou Bank on Friday and the subsequent announcement on
Saturday by the SARB of its placement of Saambou under curatorship. The
curatorship of Saambou, and the associated uncertainty this could create in
the domestic financial markets means Fitch will continue to closely monitor
the liquidity position of the small banks it rates in South Africa.
Contact: Dumo Motau/Anushka Ramlall, Johannesburg +27-11-789 1272
Note to Editors:
Fitch's National ratings provide a relative measure of creditworthiness for
rated entities in countries where the sovereign's foreign and local currency
ratings are below 'AAA'. National ratings are not internationally comparable
since the best relative risk within a country is rated 'AAA' and other
credits are rated only relative to this risk. They are signified by the
addition of an identifier for the country concerned, such as 'AAA (zaf)' for
National ratings in South Africa.
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