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THE SMART NEWS SOURCE | Feb 11 2012 00:25 | LAST UPDATED Feb 11 2012 00:25 |
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Shares in South African banks fell on Tuesday after Fitch downgraded its outlook on Absa, Investec and Nedbank, citing deteriorating conditions in Africa's biggest economy. Fitch ratings agency cut its outlook on the three banks to negative from stable after revising its outlook on South Africa lower on Monday. It said the revision did not affect Standard Bank, which was placed on negative outlook in August, and FirstRand, whose outlook was revised to stable in September, but the agency's downbeat comments hit the broader sector. FirstRand fell 3,4% by 7.54am GMT while Standard Bank dropped 2,61%. Absa, the country's biggest retail lender, slid 1,57% and Investec slipped 0,27%. Nedbank nudged 0,7% higher. "The global credit crisis is expected to lead to lower levels of activity within the domestic economy, which is likely to add to the challenges already faced by the banking sector due to the continuation of high interest rates and record levels of consumer indebtedness," Fitch said in a statement. While South African banks have escaped the worst of a global liquidity crisis thanks to strict exchange controls, they face rising bad debts in their retail arms as consumers battle rising interest rates and inflation. -- Reuters  CONTINUES BELOW TOPICS IN THIS ARTICLE
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