Fitch warns on SA banks’ challenges

INTERNATIONAL ratings agency Fitch has said that the financial metrics of South Africa’s big five banks needed to continue to improve to mitigate an increasingly challenging operating environment.

The agency said yesterday that while profitability remained sound, operating profit may have peaked as credit growth slowed significantly last year.

It said credit growth could decline to 3 percent from 9 percent in 2015.

Fitch said it saw continued pressure in the South African operating environment this year with asset-quality metrics deteriorating and beginning to affect profitability metrics.

The agency said capital ratios could begin to erode if shareholder payout ratios were not reduced. – Bloomberg