Fitch down­grades Bar­clays Africa

The Pak Banker - - FRONT PAGE -

Credit rat­ings agency Fitch down­graded South Africa's Bar­clays Africa Group (BGAJ.J), cit­ing a lower like­li­hood of sup­port from the bank's Bri­tish par­ent as it sells down its stake. Bar­clays plc said it would sell its 62 per­cent hold­ing in Jo­han­nes­burg-listed Bar­clays Africa down to a mi­nor­ity stake over the next two to three years.

Fitch an­nounced late on Fri­day that it had down­graded the African unit's for­eign cur­rency and lo­cal cur­rency long-term is­suer de­fault ra­tios to BBB-, from BBB and BBB+ re­spec­tively, say­ing it sees a lim­ited prob­a­bil­ity of sup­port from Bar­clays in the tran­si­tion phase up to the point of sale. "The down­grades re­flect Fitch's view that there is a lower sup­port propen­sity from Bar­clays for Bar­clays Africa Group and Absa given the par­ent's in­ten­tion to sell its con­trol­ling stake in Bar­clays Africa Group (which fully owns South African do­mes­tic bank, Absa) and de­con­sol­i­date the sub­sidiary," Fitch Rat­ings said in a state­ment. The rat­ings agency added that it con­sid­ers Bar­clays Africa Group to be of lim­ited strate­gic im­por­tance to Bri­tain's Bar­clays and will not be able to fully rely on po­ten­tial in­sti­tu­tional sup­port from the par­ent.

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