Fitch downgrades FirstRand

Fitch Ratings said it downgraded FirstRand Bank Holdings Ltd.'s long-term foreign-currency issuer default rating to BBB from BBB+, short-term foreign-currency issuer default rating to F3 from F2 and national long-term rating to AA-(zaf) from AA(zaf) and FirstRand Bank Ltd.'s long-term foreign- and local-currency issuer default ratings to BBB+ from A- and national long-term rating to AA(zaf) from AA+(zaf).

The outlook is stable.

The agency said the downgrades are a result of the deteriorating macro-economic environment and worsening credit conditions in South Africa, which have resulted in weakened profitability indicators and asset quality trends. Profitability was negatively impacted by significantly higher impairment charges on the back of increased non-performing loans and equity trading losses during the financial year ended June 30.

The ratings also reflect the FirstRand's solid domestic franchise, diversified earnings and acceptable Tier 1 capital ratios, Fitch said.

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