| Thu 20 Oct 2005, 12:53 | | Nedbank Group - Fitch upgrades Nedbank Group |
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Nedbank Group - Fitch upgrades Nedbank Group and Nedbank Limited
NEDBANK GROUP LIMITED
(formerly Nedcor Limited)
(Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06
JSE share code: NED
ISIN: ZAE000004875
NEDBANK LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1951/00009/06
JSE share Code: NBKP
ISIN: ZAE000043667
PRESS RELEASE - Fitch Upgrades Nedbank Group and Nedbank Limited LTFC to `BBB";
Affirms Other Ratings
Fitch Ratings-New York/London/Johannesburg-20 October 2005: Fitch Ratings has
today upgraded the Long-term foreign currency rating of Nedbank Group Limited
("Group") and Nedbank Limited ("Bank") to `BBB" from `BBB-` (BBB minus). At the
same time, the agency upgraded the Individual rating of the group and the bank
to `C" from `C/D". All other ratings of the group and bank have been affirmed.
The Outlook on all the Long-term ratings is Stable. The full list of ratings is
detailed at the end of this announcement.
"The upgrade in the Foreign Currency and Individual ratings reflects improvement
in the banking group"s performance ratios and key risk indicators and the
expectation that this trend will continue," said Ed Thompson, a Senior Director
at Fitch Ratings. "The significant restructuring undertaken by the new
management team over the past two years has led to higher core profitability as
exhibited by better margins and cost control, as well as a cleaner balance
sheet. Non-performing loans have also declined assisted by a positive economic
environment. In addition, the improved internal capital generation combined with
the capital injection in May 2004 has led to stronger capital ratios."
Fitch notes that these positive trends are balanced by a relatively weak retail
franchise compared to its main competitors, and as a result a low contribution
from fees and commissions and loss of market share in some business segments.
The company must now generate a more consistent revenue stream and regain market
share in a very competitive environment.
For the group, the Foreign and Local currency Long-term, Short-term and Support
ratings also reflect its majority ownership by Old Mutual Plc (rated `A-` (A
minus)). This support was clearly demonstrated during its recent restructuring
exercise and recent capital injection.
For the bank, its Long-term local currency and Support ratings reflect its
sizeable domestic franchise, systemic importance to the banking system and as a
result the expected support by the South African Reserve Bank.
Nedbank is South Africa"s fourth largest bank. It has three core operating
divisions - Nedbank Corporate, Nedbank Retail and Nedbank Capital. The group is
50.6%-owned by Old Mutual and its subsidiaries.
Nedbank Group Limited
Long-term foreign currency rating upgraded to `BBB" from `BBB-` (BBB minus),
Outlook Stable;
Long-term local currency rating affirmed at `BBB", Outlook Stable;
Short-term foreign currency rating affirmed at `F3";
National long-term rating affirmed at `A+ (zaf)", Outlook Stable;
National short-term rating affirmed at `F1";
Individual rating upgraded to `C" from `C/D";
Support rating affirmed at `2".
Nedbank Limited
Long-term foreign currency rating upgraded to `BBB" from `BBB-` (BBB minus),
Outlook Stable;
Long-term local currency rating affirmed at `BBB+", Outlook Stable;
Short-term foreign currency rating affirmed at `F3";
National long-term rating affirmed at `AA-(AA minus) (zaf)", Outlook Stable;
National short-term rating affirmed at `F1+";
Individual rating upgraded to `C" from `C/D";
Support rating affirmed at `2".
CONTACT: Ed Thompson, New York Tel: +1 212 908 0364; Anthony Walker,
Johannesburg, +27 11 516 4900.
Fitch"s rating definitions 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.
Fitch"s National ratings provide a relative measure of creditworthiness for
entities in countries with relatively low international sovereign ratings and
where there is a demand for such ratings. The best risk within a country is
rated `AAA" and other credits are rated only relative to this risk. National
ratings are designed for use mainly by local investors in local markets and are
signified by the addition of an identifier for the country concerned, such as
`AAA (zaf)" for National ratings in South Africa. Specific letter grades are
therefore not internationally comparable.
Date: 20/10/2005 12:53:04 PM Produced by the JSE SENS Department
