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\t\t<\/span><\/p>\n <\/span><\/p>\n \n \t\t\u00a9 Thomson Reuters 2012 All rights reserved<\/p>\n","protected":false},"excerpt":{"rendered":" Overview — On Oct. 12, 2012, we lowered the long-term foreign currency sovereign rating on the Republic of South Africa to ‘BBB’ from ‘BBB+’ and the long-term local currency rating to ‘A-‘ from ‘A’. We also lowered the short-term local currency rating to ‘A-2’ from ‘A-1’ and affirmed the short-term foreign currency rating at ‘A-2’. […]<\/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-15617","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\/15617","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=15617"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/15617\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=15617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=15617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=15617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Overview\n -- On Oct. 12, 2012, we lowered the long-term foreign currency sovereign \nrating on the Republic of South Africa to 'BBB' from 'BBB+' and the long-term \nlocal currency rating to 'A-' from 'A'. We also lowered the short-term local \ncurrency rating to 'A-2' from 'A-1' and affirmed the short-term foreign \ncurrency rating at 'A-2'. The outlook remains negative.\n -- We are therefore lowering the long-term rating on FirstRand Bank Ltd \n(FRB) to 'BBB' from 'BBB+' and the long- and short-term ratings on FirstRand \nLtd. (FRL) to 'BBB-\/A-3' from 'BBB\/A-2'.\n -- At the same time, we affirmed the South Africa national scale ratings \non both entities, following the revision of the mapping guidance for the South \nAfrica national rating scale following the sovereign downgrade.\n -- The negative outlook on both entities reflects the negative outlook on \nSouth Africa.\nRating Action\nOn Oct. 16, 2012, Standard Poor's Ratings Services lowered the long-term \nrating on FirstRand Bank Ltd. (FRB) to 'BBB' from 'BBB+' and affirmed the \n'A-2' short-term rating. We also lowered the long- and short-term ratings on \nFirstRand Ltd. (FRL), the nonoperational holding company, to 'BBB-\/A-3'\nfrom 'BBB\/A-2'. The outlook on the two entities is negative.\n\nAt the same time, we affirmed the South Africa national scale ratings on FRB \nat 'zaAA\/zaA-1' and on FRL at 'zaAA-\/zaA-1' following the revision of the \nmapping guidance for the South Africa national rating scale following the \nsovereign downgrade.\nRationale\nThe rating actions on FRB and FRL follow the lowering of the long-term foreign \ncurrency ratings on South Africa (see \"South Africa FC Long-Term Rating \nLowered To 'BBB'; LC Ratings Lowered To 'A-\/A-2'; Outlook Remains Negative,\" \npublished on RatingsDirect on Oct. 12, 2012). While the stand-alone credit \nprofile (SACP) of FRB remains at 'bbb+', which is above the foreign currency \nsovereign credit rating, the ratings on the bank are capped by the sovereign \nrating. We do not rate South African banks above the sovereign foreign \ncurrency ratings because of the direct and indirect effects the sovereign in \ndistress would have on a bank's operations.\n\nDue to its status as a nonoperational holding company, we rate FRL one notch \nbelow the issuer credit ratings on FRB. This reflects FRL's reliance on \ndividends from operating companies to meet its obligations, which exposes the \nentity to potential regulatory impositions and structural subordination.\n\nThe lowering of the sovereign ratings reflects our opinion that strikes in \nSouth Africa's mining sector will likely feed into the political debate in the \nrun-up to the 2014 elections, which may increase uncertainties related to the \nAfrican National Congress' (ANC's) future policy framework. In our opinion, \nunderlying social tensions in South Africa will increase spending pressures \nand reduced fiscal flexibility for the government. Due to production losses, \nwe now expect GDP growth to soften to not more than 2.5% in 2012 and the \ncurrent account deficit to increase to at least 5.1% of GDP.\n\nOutlook\nThe negative outlook reflects that on South Africa. We would lower the ratings \non both entities in the event of a sovereign downgrade. Furthermore, \nheightened economic risk--either through lower domestic economic growth or \nincreasing political risks--could increase funding and liquidity risks, which \nwould result in a downward revision of our assessment of the bank's SACP. \nHowever, as the SACP of FRB is currently above the foreign currency ratings on \nSouth Africa, this would not affect its ratings as long as the SACP remains at \nleast 'bbb'.\n\nWe will maintain the one-notch differential between FRL and FRB, reflecting \nour view that FRL's status exposes it to potential regulatory impositions and \nstructural subordination.\n\nA revision of the outlook on the sovereign to stable would trigger a similar \noutlook revision on FRB and FRL, all other things being equal.\nRatings Score Snapshot\nIssuer Credit Rating BBB\/Negative\/A-2\nSACP bbb+\n Anchor bbb\n Business Position Adequate (0)\n Capital and Earnings Adequate (0)\n Risk Position Strong (+1)\n Funding and Liquidity Average and Adequate (0)\n\nSupport 0\n GRE Support 0\n Group Support 0\n Sovereign Support 0\n\nAdditional Factors -1\n\nRelated Criteria And Research\nAll articles listed below are available on RatingsDirect on the Global Credit \nPortal, unless otherwise stated. \n -- Banks: Rating Methodology And Assumptions, Nov. 9, 2011\n -- Bank Capital Methodology And Assumptions, Dec. 6, 2010\n -- Group Rating Methodology And Assumptions, Nov. 9, 2011\n -- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011\n -- Banks: Banking Industry Country Risk Assessment Methodology And \nAssumptions, Nov. 1, 2011\n\n\nRatings List\n\nDowngraded; Ratings Affirmed\n To From\nFirstRand Bank Ltd.\n Counterparty Credit Rating BBB\/Negative\/A-2 BBB+\/Negative\/A-2\n Certificate Of Deposit BBB BBB+\n Senior Unsecured BBB BBB+\n\n\nFirstRand Ltd.\n Counterparty Credit Rating BBB-\/Negative\/A-3 BBB\/Negative\/A-2\n\n\nRatings Affirmed\n\nFirstRand Bank Ltd.\n Counterparty Credit Rating\n South African National Scale zaAA\/--\/zaA-1 \n\nFirstRand Ltd.\n Counterparty Credit Rating\n South African National Scale zaAA-\/--\/zaA-1 \n\n\n\nComplete ratings information is available to subscribers of RatingsDirect on \nthe Global Credit Portal at www.globalcreditportal.com. All ratings affected \nby this rating action can be found on Standard Poor's public Web site at \nwww.standardandpoors.com. Use the Ratings search box located in the left \ncolumn.<\/pre>\n