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Nedbank says revenue slows as downgrade weighs

Credit ratings agencies S&P Global Ratings and Fitch in April slashed South Africa's rating to sub-investment grade after a Cabinet reshuffle by President Jacob Zuma and downgraded the nation's banks soon after.

FILE: Nedbank. Picture: EWN

JOHANNESBURG - South Africa's Nedbank posted slower revenue growth in the first three months of this year and will find it tougher to meet its full-year targets after a ratings downgrade last month, the bank said on Thursday.

Credit ratings agencies S&P Global Ratings and Fitch in April slashed South Africa's rating to sub-investment grade after a Cabinet reshuffle by President Jacob Zuma and downgraded the nation's banks soon after.

"The macroeconomic outlook for (South Africa) has deteriorated following the sovereign downgrades which will impact negatively on confidence, investment and growth," Nedbank said in a trading update for the three months to end-March.

The bank, majority owned by Old Mutual, added that its overall client activity and revenue growth was slower than expected, but the weaker growth was partially offset by better than expected credit losses.

"...we anticipate reduced levels of business and consumer confidence and that it will now be more challenging to achieve the full 2017 year guidance provided at the time of the release of our 2016 annual results," Nedbank said.

Shares in Nedbank were down 0.1% at R216.80 by 0721 GMT, compared with a 0.2% rise in the JSE's All-share index.

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