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Johannesburg - Four South African banks have been downgraded following Standard & Poor's similar rating action on South Africa.
S&P said on Wednesday that it was lowering the ratings on FirstRand Bank [JSE:FSR], Standard Bank of SA [JSE:SBK], Nedbank [JSE:NED] and Investec [JSE:INL] to BBB-/A-3 from BBB/A2.
The ratings agency said that its outlook on these institutions was stable and that the banks were likely to maintain their current robust financial profiles for the rating level over the next 24 months in the face of increasing economic pressure.
"We lowered the ratings on the banks because we do not rate South African banks above the sovereign foreign currency ratings on South Africa," said S&P.
S&P joined Fitch in cutting South Africa's credit ratings last week.
Chief investment strategist for Old Mutual's wealth division, Dave Mohr, said last week that Standard & Poor's downgrading of the country's long-term foreign currency rating was significant.
"As expected, S&P cut South Africa's long-term foreign currency credit rating to BBB-, citing the weak economic growth outlook," Mohr said.
"S&P cut South Africa's GDP growth forecast for 2014 to 1.9% from 2.7%. This is slightly better than Fitch's forecast of 1.7%, but still represents a significant downgrade of the country's growth prospects."
S&P said on Wednesday that it was lowering the ratings on FirstRand Bank [JSE:FSR], Standard Bank of SA [JSE:SBK], Nedbank [JSE:NED] and Investec [JSE:INL] to BBB-/A-3 from BBB/A2.
The ratings agency said that its outlook on these institutions was stable and that the banks were likely to maintain their current robust financial profiles for the rating level over the next 24 months in the face of increasing economic pressure.
"We lowered the ratings on the banks because we do not rate South African banks above the sovereign foreign currency ratings on South Africa," said S&P.
S&P joined Fitch in cutting South Africa's credit ratings last week.
Chief investment strategist for Old Mutual's wealth division, Dave Mohr, said last week that Standard & Poor's downgrading of the country's long-term foreign currency rating was significant.
"As expected, S&P cut South Africa's long-term foreign currency credit rating to BBB-, citing the weak economic growth outlook," Mohr said.
"S&P cut South Africa's GDP growth forecast for 2014 to 1.9% from 2.7%. This is slightly better than Fitch's forecast of 1.7%, but still represents a significant downgrade of the country's growth prospects."
