Fitch revises South African banks to negative

Fitch Ratings said it revised the outlook on Absa Bank Ltd., FirstRand Bank Ltd., Nedbank Ltd. and Standard Bank of South Africa Ltd. and their respective rated holding companies to negative from stable.

The rating actions follow the revision of the Outlook on the South African sovereign rating to negative. The outlooks on all national ratings assigned to financial institutions in South Africa remain stable, reflecting Fitch's expectation that their ranking relative to the best credit in the country will remain stable.

Fitch said the revisions reflect the four banks' concentration to South Africa, a high proportion of liquid assets invested in government securities and a weakening operating environment as indicated by the negative outlook on the sovereign rating.

The sovereign rating is effectively acting as a cap on large South African banks' viability ratings at this rating level because of their strong links with South Africa, the agency said.

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