Radio Netherlands Worldwide

SSO Login

More login possibilities:

Close
  • Facebook
  • Flickr
  • Twitter
  • Google
  • LinkedIn
Home
Saturday 1 November  

Moody's warns S.African banks over sovereign bonds

Published on 5 December 2012 - 11:09am
More about:

Moody's ratings agency warned South Africa's banks that weak economic growth in tandem with their exposure to government securities poses a risk of serious trouble ahead.

Describing the operating environment for South Africa's banks as "challenging", Moody's on Wednesday forecast modest economic growth of three percent next year.

That, the agency said, was below the pace needed to kick-start manufacturing, "tackle high unemployment and substantially improve living standards," putting a dampener on banks' business and eroding the quality of assets.

Moody's warned that banks were over-exposed to government securities, which were recently downgraded and which make up more than 150 percent of capital at the largest banks.

Downgrading the outlook for the banking system to "negative" Moody's also warned that banks were over reliant on deposits from other institutions to maintain liquidity.

© ANP/AFP
  • File picture shows cars driving past the Old Mutual bank building in ...
FacebookTwitterYou tubeSoundcloud

Video highlights

My Song: Liza Kamizazi’s gift to Rwanda’s next generation
When Rwandan singer Liza Kamikazi was about to adopt a baby boy, she was...
My Song: N'kash the fearless albino rapper
For many people living with albinism the situation in some parts of Africa...