Moody's lowers outlook for S/African banks to negative

Ratings agency Moody’s on Friday lowered its out­look for the South Afri­can banking system to negative from stable, citing deteriorating operating conditions over the next 18 months, sending shares across the sector lower.
Africa’s most advanced econo­my is expected to grow less than one percent this year, hobbled by low commodity prices, drought and political ructions that have unnerved investors.
As of 1338 GMT shares in Bar­clays Africa were down 2.2 per­cent, Standard Bank had shed 1.08 percent and Investec was 0.5 percent lower.

“The outlook expresses Moody’s expectation of how bank creditworthiness will evolve in this system over the next 12 to 18 months,” the annual banking system outlook said.
“The challenging economic outlook will strain borrowers’ repayment capacity, fuelling in­creased asset risks.”
Moody’s earlier this month kept South Africa’s sovereign rat­ing on hold at Baa2 with a nega­tive outlook, two notches above junk.