South Africa's banking stystem stable: Moody's
Ratings agency Moody's has kept the outlook for South Africa's banking system stable, citing the continuation of benign macroeconomic conditions and solid capital buffers.
"The improved operating conditions in the last two years have had a positive impact on the banking sector's performance, with almost all rated South African banks registering improved results in 2010 and first half of 2011, owing mainly to lower provisioning costs," the agency said in a statement.
South African banks have largely escaped the crisis experienced by global financial institutions.
"The South African banking sector's balance sheet is solid, with an overall tier 1 ratio of 12.07 percent and an equity-to-assets ratio of 7.15 percent as of June 2011," said Moody's.
South African banks also have a sizeable buffer to absorb liquidity pressure as the system's loans-to-deposits ratio has improved, down to 93 percent in June 2011 from 100 percent in March 2008, it said.
The agency expects South Africa's economy to grow by 3.2 percent in 2011 and around 3.0 percent in 2012, compared with 2.9 percent in 2010 and 1.7 percent in 2009.
Earlier this month, Moody's downgraded South Africa's debt outlook from stable to negative, in the face of low growth prospects, strained public finances and rising poverty and unemployment.
© 2011 AFP