Moody's places Bidvest Bank's ratings on review for downgrade
Moody's Investors Service (Moody's) has today placed on review for downgrade the Ba1 long-term local currency global scale issuer rating and the Aa2.za long-term national scale rating (NSR) of Bidvest Bank Limited (Bidvest Bank).
The rating action is primarily driven by the potential weakening of The Bidvest Group Limited's (Bidvest Group) creditworthiness, as reflected by Moody's recent decision to place the Baa3 long-term issuer rating of Bidvest Group on review for downgrade in line with the review for downgrade on the government of South Africa's Baa3 bond ratings, which may pressure its capacity to provide support to the bank. Bidvest Bank is a wholly owned subsidiary of Bidvest Group and its issuer rating benefits from affiliate support uplift.
The rating action is primarily driven by the potential weakening capacity of Bidvest Group to support the bank in case of need as captured by
Moody's recent rating review for downgrade of Bidvest Group's Baa3 issuer rating. The review for downgrade on Bidvest Group is in turn primarily driven by the review for downgrade on the government of South Africa's Baa3 bond ratings and reflects Bidvest Group's operational concentration in South Africa and exposure to the risks associated with the political, social and economic environment in the country.
Bidvest Bank's Ba1 local currency issuer rating benefits from affiliate support rating uplift from its standalone credit profile, owing to the bank's full ownership by Bidvest Group, it's association with the Bidvest brand and the strategic importance within the group. Bidvest Bank's issuer rating is therefore sensitive to any changes in Bidvest Group's capacity, indicated by the group's own Baa3 rating, to provide support to the bank.