13 June 2017
STATEMENT FROM MD OF THE BANKING ASSOCIATION SOUTH AFRICA, CAS COOVADIA
The recent credit-rating downgrades of the five largest South African banks were expected, following our country’s recent sovereign rating downgrade. The downgrades add further emphasis to the ongoing policy confusion and weak leadership in our country.
The downgrades will lower South Africa’s creditworthiness and make financing harder and more expensive to source, with knock-on effects for all South Africans, especially the poor.
Moody’s reasons for the downgrade were “pronounced economic slowdown and weakening institutional strength”, which confirms that policy uncertainty, cabinet upheavals and ongoing lack of strong and ethical leadership from government have undermined our ability to get our economy back onto an inclusive and sustained growth path.
Despite this, South Africa’s banking system remains fundamentally solid and respected in the world. We are well capitalized and a recent World Economic Forum Global Competitiveness Index found the South African banking system the second most sound in the world.
South African banking remains committed to getting South Africa onto a sustained path of inclusive growth that will help reduce poverty, create jobs and reduce inequality.
A clearly articulated, unambiguous government growth strategy will have the wholehearted support of the banking sector. We stand ready to partner with civil society, labour and government in turning the economy around.