{"id":14023,"date":"2012-08-29T15:24:08","date_gmt":"2012-08-29T13:24:08","guid":{"rendered":"http:\/\/www.myza.co.za\/08\/text-sp-publishes-bicra-report-on-south-africa\/"},"modified":"2012-08-29T15:24:08","modified_gmt":"2012-08-29T13:24:08","slug":"text-sp-publishes-bicra-report-on-south-africa","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/text-sp-publishes-bicra-report-on-south-africa\/","title":{"rendered":"TEXT-S&P publishes BICRA report on South Africa"},"content":{"rendered":"

\t\t<\/span><\/p>\n

(The following statement was released by the rating agency)<\/span><\/p>\n

<\/span><\/p>\n

Aug 29 – Standard Poor’s Ratings Services has reviewed the banking sector of the Republic
\nof South Africa (foreign currency BBB+\/Negative\/A-2; local currency A\/Negative\/A-1; South
\nAfrican national scale zaAAA\/zaA-1) under our updated Banking Industry Country
\nRisk Assessment (BICRA) methodology. We place South Africa in BICRA group ‘4’,
\nalong with countries such as Mexico, Israel, Brazil, Qatar, Czech Republic,
\nMalaysia, and Slovakia. For the full report, see “Banking Industry Country
\nRisk Assessment: South Africa” published on RatingsDirect on the Global Credit
\nPortal.<\/p>\n

<\/span><\/p>\n

The BICRA comprises two main areas of analysis–economic risk and industry
\nrisk–where South Africa ranks ‘5’ and ‘3’, respectively.<\/p>\n

<\/span><\/p>\n

Our economic risk score of ‘5’ reflects our opinion that South Africa has
\n“high risk” in “economic resilience,” and “intermediate risk” in “economic
\nimbalances” and “credit risk in the economy,” as our criteria define those
\nterms.<\/p>\n

<\/span><\/p>\n

South Africa is a middle income level country, with GDP per capita of about
\n$8,000, but wide income disparities, and high unemployment, and suffers from
\nskill and infrastructure bottlenecks. It has a diverse economy and moderate
\nindebtedness. Government debt is expected to increase slowly as the government
\ncontinues its counter fiscal response to the current economic downturn.
\nFurthermore, the country’s large development needs and social challenges may
\nhave long-term ramifications for policy and budgetary performance.<\/p>\n

<\/span><\/p>\n

We believe that South Africa is still in a “correction” phase. This opinion
\nbalances the cautious return to credit growth (8% in 2012 and 2013) for banks
\nand our expectations for modest economic growth (2.5% forecasted in 2012,
\nincreasing in 2013) in the next two years. We also forecast stable to slow
\nreal estate price growth, which, alongside continued household deleveraging
\nand the slow economic recovery, should result in a slow improvement in banking
\nsector credit losses given the large contribution of housing loans to total
\nnonperforming loans. Nevertheless, South Africa is not immune from global
\nevents, despite its very low external debt, and economic growth and banking
\nsector recovery could derail.<\/p>\n

<\/span><\/p>\n

Bank customers have intrinsically low debt capacity due to low average wealth
\nlevels and intermediate financial leverage. We consider the lending and
\nunderwriting standards of banks, as well as payment culture and governance, to
\nbe supportive of credit operations in the country.<\/p>\n

<\/span><\/p>\n

Our industry risk score of ‘3’ reflects our opinion that the country faces
\n“low risk” in its “institutional framework” and “competitive dynamics,” and
\n“intermediate risk” in “systemwide funding,” as our criteria define those
\nterms.<\/p>\n

<\/span><\/p>\n

We assess the country’s banking regulation and supervision as “adequate,” and
\nits regulatory track record as “strong.” Banks tend to have restrained risk
\nappetite, which is one of the benefits of a sector that has many
\ncharacteristics of an oligopoly. This keeps the threat of new entrants low and
\nbalances a sizable nonbank financial services sector.
\n\u00a0 Continued…<\/strong><\/span><\/p>\n

<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

(The following statement was released by the rating agency) Aug 29 – Standard Poor’s Ratings Services has reviewed the banking sector of the Republic of South Africa (foreign currency BBB+\/Negative\/A-2; local currency A\/Negative\/A-1; South African national scale zaAAA\/zaA-1) under our updated Banking Industry Country Risk Assessment (BICRA) methodology. We place South Africa in BICRA group […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-14023","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/14023","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=14023"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/14023\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=14023"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=14023"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=14023"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}