Standard Bank Group Limited

The Standard Bank of South Africa Limited

02 April 2020

Ratings Announcement

Amendment to Standard Bank Group ("SBG") and The Standard Bank of South Africa Limited ("SBSA") credit ratings by Fitch Ratings ("Fitch") and Moody's Ratings Agency ("Moody's")

Noteholders are hereby advised of the amendment by Fitch and Moody's to SBG's and SBSA's credit ratings effective on 31 March 2020.

Fitch:

·      Fitch has downgraded the Long-Term Issuer Default Ratings (IDRs) and Viability Ratings (VRs) of SBSA to 'BB' and 'bb', respectively. The Outlook on the IDRs is Negative.

·      Fitch has taken similar rating actions on the Long-Term IDRs and VRs of SBG.

·    National Long-Term Ratings and debt ratings (where applicable) have also been downgraded from AA (zaf) to AA-(zaf).

·     The Outlook on the National Long-Term Ratings is revised to Negative from Stable.

·      Fitch has increased the notching for Tier 2 issues of SBG to two notches from one from the respective VR and National Rating anchor ratings.

·    Fitch has also widened the notching between the IDR and the long-term debt rating assigned to SBG's and SBSA's USD4 billion EMTN Programme to one from zero to reflect (under the new criteria) below-average recovery prospects because of thin Qualifying Junior Debt buffers.

The rating action by Fitch is driven by the expected negative impact from the coronavirus outbreak on the bank's operating environment and key financial metrics, notwithstanding uncertainty as to the full economic and financial market implications.

For commentary on the detailed ratings action taken on SBG and SBSA, together with the other South African Banks, please refer to the Fitch press release on the below website: https://www.fitchratings.com

Moody's:

·   SBSA's long-term foreign-currency and local-currency issuer ratings to Ba1 from Baa3. The outlook remains negative.

·      SBG's long-term foreign-currency and local-currency issuer ratings to Ba2 from Ba1. The outlook remains negative.

The primary driver for Moody's rating actions is the increasingly difficult operating environment for banks in South Africa as reflected by the agency's decision to lower South Africa's Macro Profile score from 'Moderate' to 'Moderate-' in addition to the weakening credit profile of the South African government given banks' high sovereign exposure, mainly in the form of government debt securities held as part of their prudential liquidity requirements, which links their credit profiles to that of the government.

A detailed commentary on the ratings action taken on SBG and SBSA, together with the other South African Banks may be accesses on the below website:  https://www.moodys.com

For further information, please contact:

Ann Hunter

Standard Bank Group Limited
9th Floor
5 Simmonds Street, Johannesburg PO Box 2001
South Africa
Telephone number: +27 11 415 4194

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