December 17, 2014 / 5:17 PM / 3 years ago

Fitch Affirms Land Bank, DBSA, SCM & Gensec

(The following statement was released by the rating agency) LONDON, December 17 (Fitch) Fitch Ratings has affirmed Land and Agricultural Bank of South Africa's (Land Bank), Development Bank of Southern Africa (DBSA), Sanlam Capital Markets Limited (SCM) and Genbel Securities Limited's (Gensec) ratings. The rating actions follow a peer review, which included all of the Fitch-rated South African financial institutions except for the five major banks. A full list of rating actions is at the end of this rating action commentary. KEY RATING DRIVERS - DBSA AND LAND BANK Land Bank's and DBSA's National Long-term ratings reflect the high perceived level of support the entities would receive as state-owned development finance institutions, incorporated by Acts of Parliament. They are driven by the sovereign's local currency Issuer Default Rating (IDR; BBB+/Negative). RATING SENSITIVITIES - DBSA AND LAND BANK DBSA and Land Bank's National Ratings would be sensitive to any change in Fitch's perception of the South African authorities' willingness to support these entities if required. This could include public statements of a decrease in willingness to support these entities or potentially an increase in willingness to support including explicit, formalised support such as guarantees or callable capital facilities. DBSA and Land Bank's Support Ratings could be affected if there was a multi-notch downgrade of the sovereign rating reflecting a significant weakening in the sovereign's ability to provide support. However, this scenario is unlikely. KEY RATING DRIVERS - SCM AND GENSEC The National and Support Ratings of SCM and its parent, Gensec, are driven by a high perceived level of support from Sanlam Limited (Sanlam; AA-(zaf)) in line with Fitch's assessment of these entities as strategically important subsidiaries of Sanlam. In Fitch's view SCM is not considered a core entity as it is not the sole treasury function of the parent and it independently provides financing to unrelated institutional clients. Fitch considers that Sanlam's ability to provide this support is in turn driven by its operating subsidiaries, for example Sanlam Life Insurance Limited (SLI; AA(zaf)). SCM's guaranteed obligations cover most of SCM's trading creditors and benefit from a direct guarantee from Sanlam. The guaranteed obligations are equalised with Sanlam's National Ratings. RATING SENSITIVITIES - SCM AND GENSEC The National Ratings of SCM and Gensec would be sensitive to any change in Sanlam's and/or SLI's ratings. Their Support Ratings of '2' could be sensitive to a change in Sanlam's and/or SLI's ability or willingness to support the entities. The rating actions are as follows: Land and Agricultural Bank of South Africa National Long-term rating: affirmed at 'AA+(zaf)'; Outlook Stable National Short-term rating: affirmed at 'F1+(zaf)' Support Rating: affirmed at '2' Development Bank of Southern Africa National Long-term rating: affirmed at 'AA+(zaf)'; Outlook Stable National Short-term rating: affirmed at 'F1+(zaf)' Support Rating: affirmed at '2' Sanlam Capital Markets Limited National Long-term rating: affirmed at 'A+(zaf)'; Outlook Stable National Short-term rating: affirmed at 'F1(zaf)' Support Rating: affirmed at '2' Guaranteed obligations: National Long-term rating affirmed at 'AA-(zaf)'; National Short-term rating affirmed at 'F1+(zaf)' Genbel Securities Limited National Long-term rating: affirmed at 'A+(zaf)'; Outlook Stable National Short-term rating: affirmed at 'F1(zaf)' Support Rating: affirmed at '2' Contact: Primary Analyst Mahin Dissanayake Director +44 20 3530 1618 Fitch Ratings Limited 30 North Colonnade London E14 5GN Secondary Analyst Redmond Ramsdale Director +971 4 424 1202 Committee Chairperson Erwin Van Lumich Managing Director +34 93 323 8403 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: elaine.bailey@fitchratings.com. Additional information is available on www.fitchratings.com Applicable criteria, Global Financial Institutions Rating Criteria, dated 31 January 2014 and National Scale Ratings Criteria, dated 30 October 2013 are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here National Scale Ratings Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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