{"id":1229788,"date":"2022-10-20T13:54:44","date_gmt":"2022-10-20T13:54:44","guid":{"rendered":"https:\/\/www.ghanamma.com\/2022\/10\/20\/fitch-affirms-absa-groups-rating-at-bb-outlook-stable\/"},"modified":"2022-10-20T13:54:44","modified_gmt":"2022-10-20T13:54:44","slug":"fitch-affirms-absa-groups-rating-at-bb-outlook-stable","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2022\/10\/20\/fitch-affirms-absa-groups-rating-at-bb-outlook-stable\/","title":{"rendered":"Fitch affirms Absa Group\u2019s rating at BB-, outlook stable"},"content":{"rendered":"

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Fitch Ratings has affirmed Absa Group Limited\u2019s (ABG) and its main operating subsidiaries, Absa Bank Limited (ABL), (IDRs) at \u2018BB-\u2018.<\/p>\n

The Outlooks are also stable.\u00a0<\/p>\n

Fitch said the IDRs and National Ratings are driven by the entities\u2019 standalone creditworthiness, as expressed by their Viability Ratings (VR) of \u2018bb-\u2018.<\/p>\n

\u201cThe VRs reflect ABG\u2019s strong regional franchise with diversified earnings, comfortable capital buffers and stable asset quality, funding and liquidity\u201d.<\/p>\n

However, the VRs are one notch below the \u2018bb\u2019 implied VRs, reflecting constraints from the operating environment and sovereign.<\/p>\n

This, Fitch said, underlines the concentration of their activities in South Africa and high sovereign-related exposure relative to equity. The Stable Outlooks on their Long-Term IDRs reflect that on South Africa\u2019s rating.<\/p>\n

ABG\u2019s and ABL\u2019s National Ratings with Stable Outlooks reflect our view that their creditworthiness in local currency relative to that of other South African issuers is unchanged.<\/p>\n

Stable Asset Quality<\/strong><\/p>\n

ABG\u2019s Fitch-adjusted impaired loans ratio was stable at 6.3% at the end of the first-half of 2022 but remains above that of peers.<\/p>\n

\u201cWe expect the ratio to remain above 6% for 2022 given operating environment uncertainty but below the level at the height of the pandemic (end-2020: 7.3%). Reserves coverage of impaired loans was broadly stable and in line with peers\u2019 at 67% at end-June 2022 (end-2020: 66%).<\/p>\n

Improving Profitability:<\/strong>\u00a0<\/p>\n

ABG\u2019s annualised operating profit\/risk weighted assets (RWAs) increased to 3.4% in half-year 2022 (2021: 2.9%), well above its pre-pandemic level (2019: 2.5%). This was driven by further margin expansion, a strong recovery in insurance revenue, and well-controlled costs.<\/p>\n

ABG\u2019s cost\/income improved to 55% in half-year 2022 (2021: 59%).<\/p>\n

Loan impairment charges will remain high (25% of pre-impairment operating income in half-year 2022) given rising rates and inflationary pressures.<\/p>\n

Meanwhile, Fitch withdrew all ratings of ABG and ABL for commercial reasons, adding , \u201cFitch will no longer provide ratings or analytical coverage of ABG or ABL\u201d.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Fitch Ratings has affirmed Absa Group Limited\u2019s (ABG) and its main operating subsidiaries, Absa Bank Limited (ABL), (IDRs) at \u2018BB-\u2018. The Outlooks are also stable.\u00a0 Fitch said the IDRs and National Ratings are driven by the entities\u2019 standalone creditworthiness, as expressed by their Viability Ratings (VR) of \u2018bb-\u2018. \u201cThe VRs reflect ABG\u2019s strong regional franchise […]<\/p>\n","protected":false},"author":1,"featured_media":1211594,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[72],"tags":[6113,8804,2145,2685,4338,1824,1554],"class_list":["post-1229788","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-absa","tag-affirms","tag-fitch","tag-groups","tag-outlook","tag-rating","tag-stable"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1229788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1229788"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1229788\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1229788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1229788"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1229788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}