South African Banks Prepare for Worst as Junk Rating Looms
- Lenders face credit downgrades to junk if country is cut
- Bank share prices and profit growth are already under pressure
This article is for subscribers only.
South African banks are preparing for the worst when it comes to the threat of another downgrade of the country’s debt.
“FirstRand anticipated the downgrades since 2015 and has been working on a number of proactive strategies to mitigate the impact,” said Andries du Toit, the treasurer at Johannesburg-based FirstRand Ltd., the country’s second-biggest bank by assets. The measures included tightening lending and boosting liquidity and capital buffers, he said.